Center to offer up to $5 billion in incentives for electronics manufacturing
India will offer up to $5 billion (about Rs. 42,221 crore) in incentives to companies to locally make components for gadgets from mobile phones to laptops, two government officials said, in a bid to boost the fast-growing industry and divert supplies from China build.
Electronics manufacturing in India has more than doubled in the past six years to reach $115 billion (approximately Rs. 9,71,095 crore) by 2024, driven by mobile manufacturing growth by global companies like Apple and Samsung. It is now the fourth largest smartphone supplier in the world.
But the sector has been criticized for its heavy dependence on imported components from countries such as China.
“The new plan will boost production of key components such as printed circuit boards, which will improve domestic value addition and deepen local supply chains for a range of electronics,” one of the two officials said.
The incentives are likely to be offered under a new scheme expected to be launched in two to three months, said the officials, who asked not to be identified as details of the scheme are not yet public.
The scheme is likely to provide incentives totaling between $4 billion and $5 billion to eligible global or local companies.
The plan, designed by India’s ministry of electronics, has identified components eligible for incentives and is in its final stages.
The Finance Ministry will approve the final allocation of the program soon, the first official added, with the sources expecting it to start in the next two to three months.
India’s electronics and finance ministry did not immediately respond to requests for comment.
India aims to expand its electronics manufacturing to $500 billion (approximately Rs. 42,22,075 crore) by fiscal 2030, including component production worth $150 billion (approximately Rs. 12,66,629 crore), according to top policy advisors of the government. tanks Niti Aayog.
India imported electronics, telecom equipment and electrical products worth $89.8 billion (about Rs. 7,58,334 crore) in fiscal 2024, more than half of which came from China and Hong Kong, according to a private analysis think tank GTRI.
“This plan comes at a time when it is crucial to promote component manufacturing, which will help us move towards global scale of electronics manufacturing,” said Pankaj Mohindroo, head of the Indian Cellular and Electronics Association.
© Thomson Reuters 2024
