MEITY'S MISSION NOT SO EASY

There are many hurdles on the path of India's electronics ambition. But there is a plan of action

- SURAJEET DAS GUPTA

The government wants to achieve $500 billion in electronics production in value by 2030. To put this in perspective, this is more than the size of Vietnam's gross domestic product (GDP) in 2023. Looking at it from another perspective, NITI Aayog, the government's think tank, says India now has less than 1 per cent share of the global electronics trade flow (exports) of $3 trillion which takes place through global value chains (GVCs). GVCs control 90 per cent of the global electronics production. It is here that China shines with a 30 per cent share of global electronics exports through GVCs. Even emerging countries such as Vietnam and Malaysia are well ahead of India. Vietnam's electronics exports in value are six times India's and Malaysia's are nearly four times higher.

Secondly, India's share of global electronics production, at 2 per cent, is half of Vietnam's, while China dominates the $4.3 trillion market with a share of 59 per cent. Clearly, the government must move in mission mode. But this is going to be a mission not so easy.

The odds

For starters, India has to ramp up electronics production by more than four times by 2030 from the FY24 figure of $115 billion. That is not so easy, considering that in the six years between FY17 and FY23, India managed to only double the value of its electronics production.

Indian Cellular and Electronics Association (ICEA), which has mobile device and electronics companies as its members, has said in its discussions with the government that, to achieve the target of $500 billion, at least $200 billion will have to come from exports and the rest will be from increase in the domestic production.

That means a 6.6 times increase in exports from FY24 and a 3.5 times increase in domestic production by 2030.