NITI Aayog recommended India to aim for $500 bn in Electronics Manufacturing by 2030

India should aim for $500 billion in domestic electronics manufacturing by the year 2030, according to a report by the NITI Aayog that makes specific policy recommendations for things like tariff rationalization and skilling.

The central government’s think tank, on 18th July, said that the growth in electronics manufacturing would create employment for about 6 million people.

Niti Aayog said in a report, “Global Value Chains (GVCs) are critical in modern manufacturing, involving international collaboration across design, production, marketing, and distribution. They represent 70 per cent of international trade, highlighting India’s urgent need to enhance its participation, especially in electronics, semiconductors, automobiles, chemicals, and pharmaceuticals. Electronics, in particular, is pivotal, with 75 per cent of its exports originating from GVCs.”

India’s electronics industry grew quickly, reaching $155 billion in FY23. Due in large part to the growth of mobile phones, which now account for 43% of all electronics produced, manufacturing increased from $48 billion in FY17 to $101 billion in FY23. 

NITI Aayog said that our country has reduced its dependence on smartphone imports and now manufactures 99 per cent domestically.

In order to support a strong electronics manufacturing ecosystem in India, the report recommended specific policy interventions like encouraging the production of capital goods and components, providing incentives for research, rationalizing tariffs, launching skill-building programs, facilitating technology transfers, and building infrastructure.

“Initiatives like Make in India and Digital India, improved infrastructure and ease of doing business, supported by various incentives, have stimulated domestic manufacturing and attracted foreign investments. Despite these strides, India’s electronics market remains relatively moderate, accounting for only 4 per cent of the global market, which has so far focused primarily on assembly, with limited capabilities in design and component manufacturing,” said the think tank.

According to NITI Aayog, if everything proceeds as planned, electronics production might reach $278 billion by 2029–2030. This would comprise $253 billion in finished items and $25 billion in manufacturing revenue from components.

With $111 billion in exports, employment creation is predicted to increase significantly to over 3.4 million.