Minister Ashwini Vaishnaw remains at the helm of the Ministry of Electronics & IT (MeitY), entrusted with navigating the heightened emphasis placed by Prime Minister Narendra Modi on propelling electronics sectors to new heights in this fresh term. Accompanying him now is Jitin Prasada, who has stepped in as the Minister of State for MeitY.
During Modi 2.0, the government had embarked on a series of transformative initiatives, including the implementation of several Production Linked Incentive (PLI) schemes aimed at bolstering sectors such as mobile phones, IT hardware, and numerous others. Now, in this renewed mandate, MeitY is tasked to further fortify production within the electronics and semiconductor sectors. This pivotal mission underscores the government's steadfast commitment to driving sustainable growth and innovation in these crucial sectors, laying the foundation for a robust and globally competitive Indian economy.
As both Minister Ashwini Vaishnaw and Jitin Prasada are overseeing multiple critical portfolios, the two face high expectations from the industry for efficient and effective governance. Here are the focus sectors that the industry needs MeitY to prioritise.
Scaling component manufacturing
Over the past decade, India has achieved remarkable strides in electronics manufacturing. Evolving from a mere consumer to becoming the second-largest exporter of smartphones globally, the nation has significantly bolstered its domestic production capabilities. However, to sustain this growth trajectory, it is imperative for the new government to prioritize the expansion of local component sourcing.
While there has been notable progress in sourcing components such as cables, PCB modules, and others within the country, India remains heavily reliant on imported electronic components. This dependency exposes the nation to vulnerabilities stemming from supply chain disruptions and price fluctuations. Establishing a robust domestic component industry is crucial as it would afford India greater autonomy and control over its electronics sector, enhancing resilience and fostering sustained growth. For the same, the government should introduce incentive schemes for scaling up component sourcing within the country.
Approve more Semiconductor projects
India embarked on its semiconductor journey in December 2021 with the Semiconductor and Display Scheme with a financial outlay of Rs 76,000 crores. This initiative has marked a promising beginning, signaling the country's intent to establish a robust semiconductor ecosystem. Notably, the government has already greenlit the establishment of one chip fab plant and three packing and testing plants, laying a solid foundation for further advancements in the semiconductor sector.
With numerous projects awaiting government approval, it is imperative for MeitY to prioritize securing additional funding for the scheme. To achieve this ambitious goal, serious consideration must be given to allocating another $10 billion or possibly even more in incentives. Despite the initial progress, it is crucial to acknowledge that only one fab has received approval thus far. To truly accelerate India's semiconductor ambitions, the establishment of four to five additional fabs is imperative.
If the ministry is successful in securing more fund allocation, this significant investment will not only attract global semiconductor players but also foster homegrown talent and innovation, positioning India as a formidable player in the global semiconductor landscape.
Approve Display fab proposals While significant strides have been made in the semiconductor sector under the scheme introduced in December 2021, progress on the display fab front has been relatively limited. This is a critical area for India, considering the nation's heavy reliance on imports from neighbouring countries for display technology. To address this dependency and strengthen India's self-reliance in the display sector, it is imperative for the government to prioritise the establishment of display fabs.
Despite the challenges, there is promising interest from established companies such as Sharp to invest in India's display manufacturing capabilities.
PLI for wearables, TV
India has indeed made remarkable progress in smartphone manufacturing, and the local production of laptops and PCs has also gained momentum. However, there is a growing anticipation within the wearable and TV industry for a significant impetus from the new government. In recent years, spurred by the 'Make in India' initiative, numerous Indian players across these two sectors have taken proactive steps to shift the manufacturing/assembly of their products domestically from China. This trend underscores a broader shift towards self-sufficiency and localisation within the electronics sector. As the government continues to focus on promoting indigenous manufacturing and innovation, the wearable and TV segments are poised to witness a substantial boost, further strengthening India's position as a global manufacturing hub.
Home-grown electronics brands
While leading international brands like Apple and Samsung have established large-scale manufacturing facilities in India, exporting alongside domestic production, a critical gap remains – a robust ecosystem of homegrown component manufacturers. To bridge this gap and propel India towards global leadership, the government should implement targeted incentives that encourage domestic companies to innovate and scale in the component manufacturing space. This approach has already proven successful with Indian wearables brands like BoAT and Noise, who have carved a significant niche in the market.
Pankaj Mohindroo, Chairman of ICEA says, “For India to become a key player in the global value chain (GVC) in the electronics sector, we need a mission-mode approach, with clear goals and timelines to quadruple the sector's output in the next five years. This ambitious target will require coordinated efforts across multiple ministries and continuous engagement with industry leaders.”
As a predictable regulatory environment ensures ease of doing business to foster innovation and growth in the electronics sector, minister Vaishnaw continuing to lead MeitY brings confidence within the industry players both globally and in India.