Context:
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The Ministry of Electronics and Information Technology has released a 5-year roadmap and Vision Document for the electronics sector, titled “$300 bn Sustainable Electronics Manufacturing & Exports by 2026”.
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The vision document comes in the backdrop of the PLI scheme announced by the government.
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The government has committed nearly US$17 billion over the next 6 years across four PLI Schemes:
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Semiconductor and Design,
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Smartphones,
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IT Hardware and
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Components.
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What is the objective of the report?
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To lead India’s transformation into a US$300 billion electronics manufacturing powerhouse, from the current US$75 billion, by 2026.
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To make electronics, India’s third-largest exports category, exponentially expanding exports to $120 billion from the current $10.6 billion by 2026.
Why should India concentrate on the electronics sector?
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India has a great opportunity in the electronics sector due to 2 key factors:
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Growth of digital consumption and
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Growth and diversification of global value chains.
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The key products that are expected to lead India’s growth in electronics manufacturing include Mobile Phones, IT Hardware (laptops, tablets), Consumer electronics (TV and audio), Industrial electronics, Auto electronics, Electronic components, LED Lighting, Strategic electronics, PCBA, Wearables and hearables, and Telecom equipment.
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Among these products, Mobile manufacturing is expected to cross US$100 billion annual production – up from the current US$30 billion. It is expected to constitute nearly 40% of this ambitious growth.
What are the recommendations given by the report to achieve projected growth in the electronics sector?
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Report focuses on a five-part strategy that is based on an “all of the government” approach. The strategy includes:
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Building competitiveness and scale by attracting global electronics manufacturers/brands.
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Shifting and developing sub-assemblies and component ecosystems.
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Building a design ecosystem.
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Nurturing Indian champions and
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Steadily removing cost disabilities faced by India.
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Report makes a strong recommendation on the need to focus on aggregate domestic value addition in the electronics sector, as India transforms from its current state to one that is gearing to compete with the likes of China and Vietnam.
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Report seeks a competitive tariff structure on electronic components and the removal of all regulatory uncertainty.
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It recommends a “winner takes all” strategy backed by economies of scale and global competitiveness, new and revised incentive schemes for some sectors and the need to address issues of sustainability and ease of doing business.