Local Manufacturing of Laptops, Tablets $100 Billion Opportunity for India: ICEA

NEW DELHI: India can obtain a sizable share of the global market by becoming the hub for laptops and tablets. Such a move will give a manufacturing value of $100 billion by 2025 and will also create 5 lakh additional jobs, ICEA said in a statement.

“This will also result in a cumulative inflow of foreign exchange to the tune of $75 billion and investment of over $1 billion. At the same time, it would negate imports of targeted products from China leading to the reduced trade deficit and greater self-reliance,” said Pankaj Mohindroo, Chairman of the India Cellular & Electronics Association.

“Given the present geo-political situation, India has a strong opportunity to become a significant part of the global supply chain in electronics,” he added. ” “To reach the NPE,2019 targets and for turning into the global manufacturing hub, We cannot depend on Mobile phones manufacturing alone.”

India’s import of laptops is estimated to reach close to $5 billion out of which imports from China will be $4.35 billion by March 2021, industry body ICEA said.

India’s import of laptops has increased by 42% from $2.97 billion to $4.21 billion in value terms in the last five years. 87% of total imports come from China.

“In absolute terms, India’s dependency on China is very high––it has increased from US$ 2.83 billion to US$ 3.65 billion during the last five years. For the year ending March 2021,” ICEA said in a statement.

As per estimates, the global market for laptops, tablets and desktop computers has grown from $229.38 billion in 2018 to $240.99 billion in 2019 and is expected to stabilize around $220 billion by 2025. Only 6 global players comprise 89% of the market shipments for laptops and 81% for tablets. The United States and European Union together represent more than 40% of the global market.

The global manufacturing hubs are limited to a handful of countries with China being the predominant supplier to the world 66% market share (2019) with $100 billion in value. This shows that there is tremendous scope for policy intervention to start manufacturing laptops and tablets in India for domestic as well as the global market, ICEA said.

India has an opportunity to become the hub for laptops and tablets by capturing 18% of the global exports, ICEA said.

ICEA represents companies like Apple, Xiaomi, Motorola, Nokia, Foxconn, Wistron, Flextronics, Lava, Vivo, Motorola, Oppo, Realme, Micromax, Dixon, Salcomp and others.

The global market for electronics is approximately $2.1 trillion. Among electronic products, mobile phones, laptops, and tablets serve as the primary instruments for communication.

The global market for laptops and tablets is expected to be around $220 billion per year over the next five years while In India, the market size is estimated to continue to be around $7 billion for the same period, as per ICEA-EY report.

These devices fall under the category of Information Technology Agreement-I (ITA-1) products. Thus, the Basic Customs Duty (BCD) on their import is zero. Duties cannot be imposed on such imports as there is an inherent cost arbitrage and benefit to importing these devices as against their manufacturing in India. “Therefore, unless exports are promoted, it is unlikely that the domestic market will offer any additional growth for companies aspiring to manufacture in India,” ICEA said.

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Source: ET

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