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GDP contribution of domestic electronics component manufacturing to double soon
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SME Times News Bureau | 05 Oct, 2021
With the increasing focus of the government on domestic manufacturing of
electronics components in the country, the electronics sector will see
its contribution to GDP almost double in the next few years, industry
experts estimate.
"With series of Govt interventions like PMP,
SPECS and PLI, India is set to become the global hub for electronic
products and with the economy of this size it is important for our
country to have its own component manufacturing and echo system. This
sector today contributes 3.4 per cent to GDP and is expected to
contribute 6.4 per cent in next few years," Rajeev Khushu, Chairman,
India Electronics and Semiconductor Association (IESA) said.
IESA
is the key industry body representing the Electronics Systems Design
and Manufacturing (ESDM) and intelligent electronics industry in India.
Through its deep connection with its member companies, IESA aims to grow
the ESDM and electronics business segment in India while making India
the preferred destination for electronics and semiconductor design and
manufacturing.
Over the last few years, the government has come
out with a number of policies towards subsidising and incentivising the
manufacture of critical electronics in the country. Currently, the
electronics import bill for the India is the second highest after
petroleum and petroleum products.
The government has released a
number of policies towards significantly increasing India's domestic
electronics manufacturing and is continually improving on these
policies. These policies include the National Policy on Electronics
(NPE) that sets the vision of making India a global hub of Electronics
System Design and Manufacturing (ESDM), the Product Linked Incentive
Scheme (PLI) and Scheme for Promotion of Manufacturing of Electronic
Components and Semiconductors (SPECS) that incentivises domestic
manufacturing of electronics, among others.
As per data
available from Invest India, the agency responsible for investment
promotion in India, electronic component production has risen by as much
as $4 billion from 2014 to 2018. While the global market for electronic
components is expected to reach $191.8 billion by 2022, India's share
in global electronics manufacturing has grown from 1.3 per cent in 2012
to 3.6 per cent in 2019. Growth in the Indian electronic componentts
market is driven by rising domestic demand and a growing electronics
ecosystem coupled with initiatives like 'Make in India' and 'Digital
India'. This has resulted in the Indian Electronic Components Market
increasing from $11 billion in the financial year 2009-10 to $20.8
billion in the financial year 2018-19, showing an annual growth rate of
around 7 per cent.
"With the median age of India in twenties the
consumption of electronics is growing at a CAGR of 15 per cent for next
few decades and as a result we will leap into top 3 countries in the
ESDM consumption and top 5 countries in electronics production," Khushu
added.
Further, initiatives such as 'Digital India' and 'Smart
City' projects have raised the demand for Internet of Things. The Indian
electronics markets is considered one of the largest in the world and
expected to hit $400 billion by 2025.
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