The domestic electronics manufacturing sector in India has seen significant growth in the last six years by 187 percent from Rs 1,90,366 crore in 2014-15 to an estimated Rs 5,46,550 crore in 2019-20, with a compound annual growth rate (CAGR) of about 24 percent, according to the Ministry of Electronics & Information Technology’s annual report 2019-20.
Domestic manufacturing of electronic goods surpassed India’s imports in 2016-17.
This is an optimistic development in domestic production that will also help India reduce import dependency, bringing down the trade deficit and encouraging further adoption of the government’s call for ‘Make In India’ and ‘AatmaNirbhar Bharat’ or self-reliant India.
Mobile phones are heading the domestic electronics manufacturing sector. Mobile phone production has increased from its 10 percent share in 2014-15 (from Rs 18,900 crore to 2,25,000 crore) to 41 percent of the total electronic production in the country at present. The mobile phone sector has seen a significant jump over the years, with India now becoming the second-largest mobile handset manufacturing country in the world.
Another sector that has witnessed similar growth is the light-emitting diode industry, popularly known as the LED products industry. The domestic manufacturing of LED products grew over 7 times from Rs 2,172 crore in 2014-15 to an estimated Rs 16,250 crore in 2019-20. The rise in demand for LED products can be attributed to the low cost. It currently comprises just 3 percent of the total electronics production in the country.
The consumer electronics segment — comprising televisions, refrigerators, washing machines, microwave ovens — also reported a 51 percent increase from Rs 55,806 crore in 2014-15 to an estimated Rs 84,000 crore in 2019-20. Domestic production of LCD/LED TVs grew from 0.87 crore units in 2014-15 to 1.20 crore units in 2018-19, with 38 manufacturing units across the country, the ministry’s annual report highlights. The production of industrial electronic products has doubled in six years to 2019-20.
Strategic electronics production — such as equipment catering to defence, nuclear, and aerospace industries — recorded a 109 percent increase from Rs 15,700 crore in 2014-15 to an estimated Rs 32,800 crore in 2019-20.
The computer hardware industry, however, reported the least — 20 percent — increase compared to other sectors. Personal computer/ desktop penetration in India is 15 per 1,000 people compared to 784 per 1,000 in the US and 41/1,000 in China, indicating the potential in the Indian market.
To boost the country’s manufacturing industry further, on November 11, 2020, the government approved a Production-Linked Incentive (PLI) scheme for 10 key sectors. The government had earlier notified PLI for mobile manufacturing and specified electronic components with an outlay of Rs 40,951 crore.
