Ashwini Vaishnav: India Systematically Bolstering Domestic Electronics Ecosystem

• India targets 38 percent value addition in electronics by decade’s end, matching China, as it builds a self-reliant supply chain through the Semiconductor Mission and global partnerships.
• Minister Ashwini Vaishnaw downplays Foxconn’s repatriation of 300 Chinese engineers, citing India’s growing local talent and international support from Taiwan, the US, and South Korea.
• With $145B electronics output growing at 20 percent CAGR, India is advancing chip, component, and power electronics production via facilities in Assam and Gujarat to reduce geopolitical risks.

India is building ‘its own capabilities’ of producing electronics in a ‘very methodical and sustained manner’ and is likely to realize its value-addition goal this decade of 38 percent, stated Ashwini Vaishnaw, union minister for electronics and IT, railways and information and broadcasting.

Today, the value addition in China is around 38 percent. The minister was reacting to reports that Apple's major supplier Foxconn was repatriating some 300 Chinese engineers from its plants in India. "De-risking is acquiring the skills and making it here and creating our own supply chain, which is what we are doing", he told.

Support is arriving in the electronics manufacturing sector from nations like Taiwan, the US and South Korea as well as the nation's own engineers, he said, minimizing reliance on China and its technical staff.

Vaishnaw added nations are working towards holding social media more accountable for content, answering the question of whether regulation is necessary to stem misinformation. India is seeking political consensus on the topic and will remain receptive to amending its legal framework if necessary, he added.

India has massively grown its mobile manufacturing ecosystem and is now developing its semiconductor prowess through the Rs 76,000 crore India Semiconductor Mission and the Rs 23,000 crore components incentive programme that were announced earlier this year. India's electronics manufacturing is valued at around $145 billion and that's growing at a Compound Annual Growth Rate (CAGR) of 20 percent, he added. We're aware that there's going to be some challenge in each growth trajectory, but we're confident that we can maintain our growth", the minister told.

According to a report by Bloomberg, Foxconn has brought back more than 300 Chinese engineers and technicians from its Indian iPhone manufacturing units, allegedly because of Chinese government orders for containing the outflow of technology and talent. This is likely to pose operational challenges to Foxconn, which could affect the efficiency of its assembly lines and the training of local Indian employees as Apple expands iPhone manufacturing in India.

Although the report stated that the shortage of talent is being met by Taiwanese employees, the initiative highlights Foxconn's challenges in diversifying its supply chain amidst existing geopolitical tensions. The highest value addition in any one country (China) is 38 percent and India has already crossed 20 percent within a time frame of six to seven years. “We are on a clear path to crossing 30 percent in the coming two to three years, and reaching 38 percent within the next five years is a very reasonable target”, he said.

The Tata Electronics chip assembly facility in Assam will cater to telecom makers across the world, Micron unit in Gujarat would be providing memory chips, and power electronics would be supplied by the CG plant in Gujarat, he added.

India must be independent in all aspects to protect itself against geopolitical turbulence. "We have to enter into every machine, every piece", he stated. "We need to go into every portion of it and begin producing them".

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