India is setting an ambitious target for its electronics manufacturing sector, aiming for a substantial increase in domestic value addition. S Krishnan, Secretary of the Ministry of Electronics and Information Technology (MeitY), announced that the government is working towards achieving 40% value addition within the country's electronics ecosystem.
Deepening the Electronics Value Chain
This new goal marks a significant progression from the current domestic value addition, which stands at approximately 22% to 23%, up from an earlier range of 12% to 15%. The push to deepen the value chain is being propelled by a combination of government initiatives, including the India Semiconductor Mission (ISM), various Production Linked Incentive (PLI) schemes for mobile manufacturing and electronics hardware, and the Electronics Component Manufacturing Scheme (ECMS).
Krishnan emphasized that the ECMS is particularly crucial in strengthening the domestic supply chain for electronics components. The focus extends beyond merely increasing production volumes to enhancing the overall value generated within India.
Strategic Shift Towards Local Sourcing
The government's strategy signifies a broader shift, moving India beyond just assembling products to actively developing and sourcing more parts domestically. This approach is expected to foster a more robust and self-reliant electronics manufacturing ecosystem. For consumers, this could eventually mean a greater proportion of electronic product components are manufactured within India.
The drive for higher domestic value addition comes amidst a global surge in demand for memory, partly fueled by the growing needs of Artificial Intelligence (AI) workloads. Companies like Micron have already begun commercial production at facilities in India, with finished DRAM and NAND products being shipped worldwide, indicating the sector's growth potential and strategic importance.
Future Outlook for India's Electronics Industry
By targeting 40% domestic value addition, India is signaling its commitment to becoming a more integrated player in the global electronics supply chain. This comprehensive approach, combining policy support with strategic investments, aims to enhance India's contribution across the entire electronics manufacturing value chain as it continues to build its semiconductor capabilities.