Opportunities in Electronics and Semiconductor industry in India

Synopsis: 
The electronics Industry is one of the fastest growing industries in India and can contribute $300 Bln to our vision of US$ 5 Trillion Economy goal by 2027. The main challenge is that the local value addition is less than 17% for whatever we manufacture in India. With all current schemes like PLI (Production Link Incentive), EMC 2.0 (Electronics Manufacturing Cluster) and SPECS (Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors) we can expect Domestic manufacturing to grow faster than total market demand at the CAGR of 1.5%.

Unless we improve on the local value addition from current less than 17% to at least 40%, there won’t be an improvement of the GDP contribution by the electronics Industry. Currently it is less than 4% but it has a potential to go to even 8% plus. If we analyze key contributors to the value chain of any Electronics Product then IP/Technology is 40%, Components is 40% and Manufacturing/ Testing is 20% approximately.

To increase local value addition, we have to: Develop large Product manufacturing companies with local designs.
Make Indian Start-ups successful for IP / Technology creation. Make MSME in Electronics manufacturing successful as there are more than 10000 MSME companies in this space.
Develop Component Manufacturing Eco system in India as it contributes to 40% value of any electronic product.