The Economic Survey 2023-24, presented by Union Minister of Finance and Corporate Affairs, Ms. Nirmala Sitharaman, underscores the tremendous strides made in India's electronics sector. This period has witnessed record production and export figures, positioning India as a significant player in the global electronics market.

Record Production and Export Figures

In FY23, the domestic production of electronic items surged to an impressive US$ 98.28 billion (Rs. 8.22 lakh crore), showcasing the sector's robust growth. The export figures are equally remarkable, rising to US$ 22.72 billion (Rs. 1.9 lakh crore). These figures are not just statistics but indicators of India's growing prowess in electronics manufacturing and its increasing footprint in global markets.

A noteworthy highlight is Apple's assembly of iPhones worth US$ 14 billion in India during FY24. This accounts for 14% of Apple's global production, emphasizing India's growing importance in the global supply chain. The share of electronics goods in India's merchandise exports has seen a substantial increase, climbing from 2.7% in FY19 to 6.7% in FY24.

Shifting Trade Dynamics with the US

The trade relationship between India and the US in electronics has transformed significantly. In FY17, India faced a trade deficit of US$ 0.6 billion in electronics with the US. By FY24, this had shifted to a surplus of US$ 8.7 billion, highlighting India's competitive edge and the effectiveness of its manufacturing policies.

Global Manufacturing Dynamics

The survey highlights a major shift in global manufacturing dynamics. Multinational companies, including Apple, are diversifying their operations to mitigate risks associated with an over-reliance on China. India's appeal as a manufacturing hub is growing, driven by its large domestic market and favorable investment climate.

Government Initiatives Driving Growth

The remarkable growth in India's electronics sector is significantly attributed to government initiatives like the Production Linked Incentive (PLI) schemes and the Electronics Manufacturing Clusters (EMC 2.0) scheme. These policies have been instrumental in attracting investments, boosting production capabilities, and enhancing the overall competitiveness of the sector.

From FY18 to FY23, electronics production in India witnessed a compound annual growth rate (CAGR) of 16.19%, while exports grew by 35.7%. The Production Linked Incentive (PLI) schemes have played a crucial role in this growth, incentivizing large-scale manufacturing and enhancing domestic capabilities.

Domestic Value Addition and Employment Growth

Another significant aspect of the sector's growth is the increase in domestic value addition (DVA) in mobile phone production. DVA rose from 8.7% during FY17-19 to 22% in FY20-22. This increase indicates a deeper integration of domestic components in the manufacturing process, which not only boosts the local economy but also creates more jobs.

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Employment and wages in the mobile manufacturing segment have seen substantial growth, reflecting the sector's positive impact on the broader economy. These developments align with the government's vision of making India a global electronics manufacturing hub.

Global Market Share and Economic Impact

India's share in the global electronics export market has improved from 0.63% in 2018 to 0.88% in 2022, moving up from 28th to 24th position globally. This advancement is a testament to the sector's enhanced competitiveness and the success of strategic government interventions.

The electronics sector now accounts for approximately 3.7% of the global market share and contributes 4% to India's GDP in FY22. This growth is significant, considering the strategic importance of the electronics sector in the global economy and its potential to drive further economic development in India.

Conclusion

The Economic Survey 2023-24 paints a promising picture of India's electronics sector. With record production and exports, increased domestic value addition, and significant global market share, the sector is poised for continued growth. Government initiatives like the PLI and EMC 2.0 schemes have been instrumental in this success, fostering an environment conducive to large-scale manufacturing and attracting multinational investments.

As India continues to strengthen its position in the global electronics market, the focus on innovation, infrastructure development, and strategic policy support will be crucial. The journey ahead looks promising, with the potential to make India a global leader in electronics manufacturing, driving economic growth and creating a wealth of opportunities for its population.

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