India’s Electronics Manufacturing Set For $240 Bn Demand Growth By 2030: CII

The demand for electronic components and sub-assemblies in India is set to skyrocket, according to a recent report by the Confederation of Indian Industry (CII). The report forecasted that the demand, currently at USD 45.5 billion in 2023, will surge to USD 240 billion by 2030. This growth is expected to support electronics production worth USD 500 billion.

One of the standout segments in this burgeoning market is printed circuit board assemblies (PCBAs), which are projected to grow at an impressive compound annual growth rate of 30 per cent, reaching USD 139 billion by 2030. The demand for PCBAs alone, largely met through imports today, is expected to expand significantly, creating a market worth USD 87.46 billion by the end of the decade.

Components such as lithium-ion batteries, camera modules, mechanical enclosures, displays, and printed circuit boards, which together accounted for 43 per cent of the components demand in 2022, are identified as high priority. The demand for these components is expected to grow to USD 51.6 billion by 2030. The report highlighted the critical need for India to reduce its reliance on imports for these key components, which currently see minimal domestic production.

The report also outlined several challenges that need to be addressed to bolster domestic manufacturing. These include higher manufacturing costs compared to rival economies like China, Vietnam, and Mexico, the lack of large domestic manufacturing corporations, an underdeveloped design ecosystem, and insufficient availability of raw materials.

To overcome these challenges, the report recommended significant policy support. This included providing fiscal incentives of 6-8 per cent for a duration of 6-8 years for select components and sub-assemblies, and introducing a revised Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS 2.0) with subsidies ranging from 25-40 per cent. Additionally, it suggested lowering import tariffs on priority components to below 5 per cent to enhance global competitiveness and pursuing free trade agreements with the EU, UK, GCC countries, and emerging economies in Africa.

The implementation of these measures is expected to yield substantial benefits, including the creation of approximately 2.8 lakh jobs by 2026 and a decent boost to the GDP.