March 24, 2023

India takes on China, Vietnam in electronics manufacturing; eyes $300 billion in local production by FY26 – Times of India

NEW DELHI: India’s counter-attack on China and Vietnam in manufacturing of electronics is set to get additional fire-power.
On target is $300 billion in output over the next four years, including $120 billion reserved for exports; broadening of product-basket for incentives; specially crafted large industrial zones with modern facilities; and permissions for factories that may hold up to as many as 1 lakh workers with dormitories, kitchens, medical set-ups, and housing complexes.
The plan is to give scale to electronics manufacturing set up that would ultimately lead to creation of strong supplier eco-system, massive employment opportunities, and global servicing.
IT and electronics minister Ashwini Vaishnaw and junior minister Rajeev Chandrasekhar presented ‘Vision Document 2.0’, prepared by their ministry and presented by the India Cellular & Electronics Association through its chairman Pankaj Mohindroo.
Vaishnaw said that the government, which has already committed nearly $17 billion over the next six years across four production-linked incentive (PLI) schemes (semiconductor and design; smartphones; IT hardware, and components) will be coming out with more categories where benefits will be extended for local manufacturing. These are likely to include hearables and wearables, industrial and auto electronics, and telecom equipment.
The government wants the charge to come not only from global players such as Taiwanese Foxconn and Wistron (both Apple’s contract manufacturers) and Korean Samsung, but also from ‘domestic champions’ such as Optiemus, Dixon, and Lava.
Vaishnaw said he has spoken to the labour ministry regarding issues in setting up large factories that can have as many as one lakh employees, and have housing complexes for the workers.
Also, he said that his ministry is identifying land for building vast integrated manufacturing zones (going up to as much as 1,000 acres) with all requisite facilities such as land, power, roads, and connectivity built-in, much in line with what’s allotted in China and Vietnam.
The industry welcomed the proposal. “The plug-and-play model is indeed welcome. It takes away concerns around land acquisition, road and infra, power, and connectivity,” Sunil Vachhani, chairman of Dixon said.
Lava’s chairman Hari Om Rai also said that local companies need to go global while expanding manufacturing within India.
Minister Chandrasekhar said growth of digital consumption and diversification of global value chains will help achieve the targets.
Chinese conspicuous by absence
The mega meet of local and global electronics makers did not have Chinese players as participants or speakers.
Asked what role does India sees for the Chinese in Indian electronics manufacturing, junior IT & electronics minister Chandrasekhar said, “We don’t have any particular view… the concept of trust in value chain is an important attribute in post-Covid world and any investment and any investment partner that meets the trust criteria can manufacture.”

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