Buoyed by the Government’s Rs 2.3. lakh crore policy push for self-reliant India, the domestic electronics manufacturing industry is expected to see 30 percent growth in the next fiscal to be worth nearly Rs 7 lakh crore.

While the Government continues to make efforts to move up in the global electronics supply chain and is expected to come up with new policies and incentive schemes. for wearables and IT hardware, the immediate challenges are those around electronic components, mainly electronic chips, and potential threats from the coronavirus pandemic.

The value addition from local manufacturing units is expected to go up to 25 per cent next year from 18 percent at present. The government is aiming to grow overall electronics production in the country by 30 percent to over Rs 6.9 lakh crore next year, a senior Ministry of Electronics and IT(Meity) official said.

The Meity has proposed a PLI scheme of about Rs 22,000 crore to promote wearables as well as enhance incentives for IT hardware manufacturers in the next financial year as it aims to increase electronics exports from India by 50 percent.

According to industry body ICEA, whose members include Apple, Foxconn, Wistron, Lava and Vivo, mobile phone production in the country peaked at Rs 2.2 lakh crore in 2020- 21 and is expected to cross Rs 2.75 lakh crore by March 2022.

Chinese players like Xiaomi, BBK Electronics group firms Vivo, Oppo, Realme and Iqoo dominate the smartphone segment with about 70 percent market share.

Chinese companies are only focussing on catering to the Indian market requirement. Therefore, they have not participated in the PLI scheme. We expect Indian companies to do well and become global champions, the Meity official said.


When asked about the contribution of Indian companies in electronics production, India Cellular and Electronics Association Chairman Pankaj Mohindroo said the share has come down from 47 percent of volume in 2016 to under 8 percent now.

The Government has already introduced a significant measure in PLI wherein the USD 200 (about Rs 15,000) segment is reserved for Indian companies. A slew of other support measures is also being planned and we are sure that not only will Indian companies have a share of the domestic market but they will also emerge as global champions at least in the entry level segment, Mohíndroo said.

The electronics manufacturing growth in the country remained almost between Rs 5,33,670 crore in 2020-21 and Rs 5,33,550 crore in 2019-20.

We are exporting 50 lakh phones, including smartphones. However, the concern remains that we are not still close to a strong electronics brand emerging out of India which could cater locally as well as become India’s face globally, market research firm Techarc Founder and Chief Analyst Faisal Kawoosa said.

The import of electronics in 2020-21 reduced to around Rs 2.85 lakh crore from about Rs 2.9 lakh crore in 2019-20 due to an increase in local manufacturing of consumer electronics items especially LED television sets and electronic components. However, the import in the IT hardware segment increased to around Rs 79,000 crore in 2020-21 from about Rs 68,400 crore in 2019-20. MAIT CEO George Paul said that the digital infrastructure supported economic activity across the world during the lockdown which resulted in a boom in demand against a scaling down of worldwide semiconductor capacity. 

Paul said that the shortage of semiconductors is because of a combination of the US-China trade war and the outbreak of COVID and the forecast of a possible declaration of global demand. Infineon Technologies India Managing Director Vinay Shenoy said the demand for semi-conductors remains extremely high and is by far outstripping supply. He said that the imbalance between supply and demand will continue for several quarters and will persist into 2022. BenQ India & South Asia managing director Rajeev Singh said that in the short term, the situation is gradually becoming better as trade gateways are getting aligned. 

The government has made a third attempt to attract electronics chip makers in the country with  Rs 76,000 crore incentive schemes spread over a period of six years and is confident of attracting 100 companies in the next 4 years under the  package. The Government expects two companies manufacturing electronic chips and two companies for manufacturing display units to set up their units in the country within four years with investment in the range of Rs 30,000 crore-Rs 50,000 crore. In the context of the prevailing political situation as well as pandemics pressures on electronics supply chains, there is a greater emphasis on diversification and building regional hubs. In this context, India’s initiative to build an end-to-end semiconductor manufacturing value chain in India from fab to box offers an unparalleled opportunity to establish India as a global electronics manufacturing hub, CMR Head of Industry Intelligence group Prabhu Ram said.