Why India may fall short of its $300 billion target for electronics manufacturing

 

The electronics industry in India is grappling with a significant shortfall in domestic demand. The majority of IT hardware consumed in the country is imported, indicating a lack of progress in domestic manufacturing. This challenge has resulted in a depressed manufacturing sector and hindered the nation's ability to meet its ambitious production targets.

Although the situation appears daunting, there are some positive indicators within specific sectors. Consumer electronics, wearables, and automotive electronics have demonstrated robust performance and are contributing to the overall growth of the industry.

However, the production of electronic components for white goods — particularly LED technology — is not receiving adequate support from the Production-Linked Incentive (PLI) scheme. To address this, industry experts suggest the need for an independent PLI programme specifically targeting electronic components.

In addition to falling short in manufacturing production, India is also facing challenges in meeting its electronics export targets. While the government aimed to achieve exports worth $105 to 130 billion, estimates suggest that the actual figure is expected to range between $58 and 69 billion. This discrepancy highlights the need for a comprehensive evaluation of current export strategies and the identification of measures to bolster India's position in the global market.

It is essential to note that these assessments were made before the recent revision of the PLI scheme for IT hardware.