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India’s drive to become a global manufacturing hub is set to gain momentum, with the electronics components and sub-assemblies sector expected to reach USD 240 billion by 2030.
This growth is projected to create at least 280,000 new jobs by 2026, according to a recent report.
Demand and Growth Projections
The Confederation of Indian Industry (CII) released a report on Sunday, highlighting that priority components and sub-assemblies, including printed circuit board assemblies (PCBAs), are expected to grow at a robust pace of 30%, reaching USD 139 billion by 2030.
Last year, the demand for these components and sub-assemblies stood at USD 45.5 billion, supporting USD 102 billion worth of electronics production.
High Priority Components Identified
The report identifies five priority components and sub-assemblies—lithium-ion batteries, camera modules, mechanicals (such as enclosures), displays, and PCBs—as crucial for India.
These components accounted for 43% of the components demand in 2022 and are expected to grow to USD 51.6 billion by 2030.
The report noted that these components are either nominally produced in India or heavily import-dependent.
PCBA Potential
The report emphasizes the high potential of PCBAs for India. “Similarly, PCBA is a high potential category for India since most of the demand is met by imports.
This segment is expected to grow by 30%, leading to a demand creation of USD 87.46 billion by 2030,” the report noted.
Recommendations for Fiscal Support
To support the industry, the report recommends crafting a scheme to provide fiscal support for select components and sub-assemblies, ranging from 6 to 8%.
“The fiscal support is to be extended for a period of 6 to 8 years to ensure adequate time for scaling up and enhancement in value addition,” it added.
Introduction of SPECS 2.0
The report also suggests introducing the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) 2.0 with subsidy support ranging from 25% to 40% to attract potential investors across both brownfield and greenfield categories.
Rationalization of Import Tariffs
The CII report calls for the rationalization of import tariffs on priority sub-assemblies and components such as camera modules, display modules, and mechanicals.
“The import tariffs on priority sub-assemblies and components like camera modules, display modules, mechanicals, need to be urgently rationalised in line with key competing economies,” the report added.
Boosting Export Demand
The report highlights the benefits of creating export demand for India-made products. “The creation of export demand for India-made products have the twin advantages of increasing export volumes and helping boost domestic manufacturing of components and sub-assemblies,” according to the CII.
Economic Benefits
Overall, the policy support outlined in the report aims to bring various economic benefits from developing the components and sub-assemblies ecosystem in India, significantly contributing to the country’s ambition to become a global manufacturing powerhouse.
