After tasting success in domestic manufacturing in smartphones with global manufacturers like Apple and Samsung setting up bases in the country, the ministry of electronics and IT (MeitY) is now trying to create an indigenous ecosystem in the field of electronics manufacturing so that companies in the supply chain network can relocate from their current bases in China, Vietnam and Taiwan. The aim is to promote India as a hardware manufacturing nation.
Towards this end, MeitY has formed a nine-member task force with industry players to deliberate on electronic products and components that can be brought under domestic manufacturing, current issues with regard to hardware manufacturing, need for any policy intervention, timeline by which certain issues can be resolved, among other things.
Industry representatives like Ajai Chowdhry, founder of HCL; Sanjay Nayak, MD Tejas Networks
“India has been doing well in information technology (IT) but a lot more needs to be done in hardware manufacturing. There is still a lot of dependence on other countries for many products and with this roadmap in place we aim to reduce our imports,” a senior government official privy to the development told FE.
“This suggestion to make a taskforce and resolve issues around manufacturing has come from the industry. We will soon conduct our first meeting to discuss the subject and then will be able to come up with recommendations,” the official said without giving any timeline for sending the recommendations.
While India has become the second-largest manufacturer of mobile phones, the manufacturing of other electronic products is yet to take off in the country. According to government data, the mobile phone production in the country increased to 310 million units valued at Rs 2.75 trillion in FY22, from 58 million units valued at about Rs 18,900 crore in 2014-15.
According to India Cellular and Electronics Association (ICEA), the mobile phone industry will cross the $40-billion manufacturing output mark (around Rs 3.3 trillion) and exports of $10-billion (Rs 82,000-crore) mark in FY23.
“There was a time when all these mobile phones were imported. Now, we have started the production here in the country. The plan is to go down the lower level to manufacturing components and chips,” the official said.
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While the Rs 38,601-crore PLI scheme for smartphones was an instant success, the same for hardware, including laptops, tablets, servers and others, received a lukewarm response. Lately, the government has been working to revise the scheme by reducing the investment limits and provide additional incentives.
Earlier this year, minister of state for electronics and IT Rajeev Chandrasekhar had said that the government would soon launch a new PLI scheme for IT hardware and also offer additional incentives for manufacturers that will include Indian-designed intellectual property into their products.