The Current Electronic Products Manufacturing Sector in India

Having been associated with UKB for close to three decades now, Manoj has been at the forefront of the company’s successful journey so far in the Indian electronics space. In a recent interaction with Siliconindia, Manoj Tayal, MD, UKB Electronics shared his insights on the current electronic product manufacturing in India, its importance from our country’s economic growth standpoint and many other aspects. Below are the excerpts from the exclusive interview

What are your thoughts on the current electronic product manufacturing sector in India?

Driven by various government initiatives, India has made significant strides in electronic product manufacturing in recent times. Today, India is stepping-up its efforts to boost local manufacturing of electronic goods with the vision to capitalize on the increased demand from global companies that are looking beyond China for production. The focus on domestic production aims to reduce dependence on imports and boost the country’s self-reliance in technology. Several global electronics companies have established manufacturing units in India and are contributing to job creation and skill development. However, challenges like infrastructure limitations and bureaucratic hurdles persist. While progress is evident, there’s still room for improvement. Addressing infrastructural gaps, streamlining regulatory processes, and fostering R&D will further bolster the electronic product manufacturing landscape. Additionally, nurturing a robust supply chain and promoting innovation can enhance India’s competitiveness in the global electronics market. The ongoing momentum in this sector presents an optimistic outlook, but sustained efforts are essential for continued growth and technological advancement.

Briefly explain the impact of current global economic and geopolitical crisis on Indian electronic product manufacturers.

The ongoing global economic and geopolitical crisis has posed challenges for Indian electronic product manufacturers, wherein supply chain disruptions, increased costs of raw materials, and fluctuating currency values have added a variety of complexities for the industry to handle. Additionally, geopolitical tensions have influenced trade dynamics by adversely impacting both exports and imports. However, this crisis has also underscored the importance of self-reliance, prompting a renewed focus on domestic production and reducing dependency on external sources. Indian manufacturers are navigating these uncertainties by adapting strategies, diversifying supply chains, and leveraging government incentives to mitigate the impact and foster resilience in the face of global challenges.

Suggest a few ways for Indian electronic product manufacturers to successfully tackle the tough competition from Chinese manufacturers.

Currently, India is entering into FTAs with other nations for duty-free imports, enabling those countries to export duty-free material to India. This is now becoming a threat to Indian Electronics Industry, as various Chinese companies are taking undue benefit of these treaties and supplying material to Indian market through various channels. To efficiently tackle the tough competition from Chinese counterparts, Indian manufacturers must invest in R&D to innovate and offer unique products will enhance competitiveness. Additionally, establishing robust supply chains and improving infrastructure can help streamline manufacturing processes, reducing costs and production times. Also, while collaborating with the government to leverage schemes like PLI can provide financial support and incentive, fostering skill development programs to enhance the workforce’s technical capabilities and emphasizing on quality, innovation and efficiency enables Indian manufacturers to carve-out a distinctive position for in the global market and stand resilient against Chinese competition. Similar to China, India must strive for self-reliance in advanced electronics. Despite having significant capabilities in chip design, India lacks chip manufacturing capabilities. It is imperative to address this situation to truly achieve success in the electronics policy.

How will increasing the export of Indian electronic products help in achieving rapid economic growth?

Currently, the Indian electrical machinery & equipment sector has seen significant expansion, with exports surging from $10.76 billion to $18.84 billion between 2012 and 2021. The Make in India campaign in 2014 marked a pivotal moment, catalyzing efforts to transform India into a global manufacturing hub. Boosting the export of Indian electronic products is pivotal for achieving rapid economic growth on multiple fronts. Firstly, it contributes significantly to the country’s trade balance, generating foreign exchange reserves. The revenue generated from increased exports enhances India’s capacity to invest in key sectors, infrastructure, and social development, fostering overall economic prosperity. Secondly, elevated exports signify global competitiveness, attract foreign investments, and establish a positive economic outlook, thereby creating a favorable environment for sustained growth.

Furthermore, export-driven growth of the electronic sector stimulates employment opportunities. The increased demand for Indian electronic products globally will lead to the expansion of manufacturing units, supporting job creation and skill development. The nation must seize the opportunity to enhance its electronics hardware export and manufacturing capabilities, aligning them with software progress to position itself as a global powerhouse in the electronics domain. The implementation of these strategies is imperative for India not to miss the bus in this transformative era.

Elaborate on the government’s role in supporting innovation and research to encourage indigenous manufacturing of electronic products.

Presently, India is eyeing a significant economic milestone of achieving $5 trillion GDP and becoming a $1 trillion digital economy by 2025. This growth projection predicates a surge in demand for electronic products which is expected to reach $400 billion by the same year. Without prompt measures to fortify domestic electronic manufacturing, this surge may intensify reliance on imports. The Indian government has responded proactively, implementing various initiatives to boost electronic manufacturing, curb import dependence, and spur exports. India’s government has implemented various initiatives to enhance electronics manufacturing, diminish reliance on imports, and amplify exports. Programs like Make in India, the National Policy on Electronics (2019), PLI Scheme for the electronics sector, Modified Special Incentives Scheme, and the Electronics Manufacturing Clusters scheme aim to incentivize domestic manufacturing, localize electronics production, attract foreign direct investment, and stimulate export growth. These measures collectively contribute to fostering a self-reliant and globally competitive electronic manufacturing ecosystem in India.

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