As per a report by India Cellular & Electronics Association (ICEA), India has the potential to achieve manufacturing value of $100 billion in laptops and tablets by 2025. In the last few years, India has emerged as the hub of Smartphone manufacturing and the next stop for the country should be being a manufacturer of laptops, tablets, and other consumer electronics items.
“This will also result in a cumulative inflow of foreign exchange to the tune of $75 billion and investment of over $1 billion. At the same time, it would negate imports of targeted products from China leading to the reduced trade deficit and greater self-reliance,” said Pankaj Mohindroo, the Chairman of the India Cellular & Electronics Association, which has representation from Apple, Xiaomi, Motorola, Nokia, Foxconn, Wistron, Flextronics, Lava, Vivo, Motorola, Oppo, Realme, Micromax, Dixon, Salcomp, and others.
“Given the present geopolitical situation, India has a strong opportunity to become a significant part of the global supply chain in electronics,” he added. “To reach the NPE, 2019 targets and for turning into the global manufacturing hub, we cannot depend on Mobile phones manufacturing alone.”
The report released by ICEA was prepared in collaboration with consulting firm Ernst & Young, and it talks about India’s dependence on China on products such as laptops.
As per the report, India imports laptops worth 5 billion dollars every year and around 70 per cent of that comes from China. The laptops worth 3.5 billion dollars which are imported from China every year could be manufactured in India if the government incentivizes the manufacturing of these and puts severe restrictions on cheap imports.
The global market for laptops and tablets is around 240 billion dollars with major markets being the United States and the European Union. Given the fact China’s relations with Western powers is worsening with every passing day and the trade war with the United States is set to intensify further, India has the opportunity to become an integral player of the global electronics supply chain.
The United States recently banned the export of semiconductors – essential devices for modern consumer electronics products – to the Chinese companies, India could fill up vacant space and become an electronics manufacturing powerhouse. Given the fact India is already the second-largest player after the United States as far as the software industry is concerned, an edge in hardware manufacturing would make the country a tech powerhouse.
As of now, China is a global electronics manufacturing powerhouse with the production of goods worth $100 billion every year which is around half of the global market.
Indian manufacturing infrastructure is less competitive compared to China and Vietnam given the high cost of power, taxes, and lack of ease in doing business. “India must address these issues in the long run. Meanwhile, the government should endeavour to offset these disabilities by providing incentives that are WTO-compliant, easy to implement and can help India take off from the export runway,” said the report.
These issues need to be addressed to make the country an electronics manufacturing hub. And, the highly successful PLI scheme could also be extended to laptop and tablet manufacturers, argued the report.
The future of any economy depends on consumer electronics given the fact the world is getting digitized at an unprecedented rate. India, along with the United States, is already a leader in the software component and now the government needs to work on an aggressive expansion of capacity on the hardware front. Only then India can become the third pole of the global economy with the United States and China