Electronic Sector in India - Daily Current Affair Article


According to the latest Dun & Bradstreet report, India could emerge as an alternative destination for newly planned investments in the electronics sector in the near future.


In the latest report by Dun & Bradstreet recently, India has been considered as the next destination in the electronic sector. The report noted that state Governments reform labor laws, proactive decisions of low-paid skilled workers, India's strong position in software development make India a hub for the development of electronic devices, mobile manufacturing, and the Internet of Things (IoT).

The electronic market in India

  • India's electronic sector has grown at a growth rate of 14% between 2016 and 2019. The market size has increased from the US $ 145 billion to the US $ 215 billion from 2016 to 2019. However, electronic mobile phones have contributed more to this growth. The consumer electronics and appliance industry in India is expected to become the fifth largest market in the world by 2025.

Government initiatives for the Electronic sector

  • The Union Budget 2020-21 allocates the US $ 920 million to the Ministry of Electronics and Information Technology (MeitY). In the allocated budget, revenue expenditure allocation is US $ 870 million and capital expenditure allocation is the US $ 50 million.
  • In October 2020, the government approved applications from 16 electronics companies, including 10 mobile phone manufacturers, for a reward under the product-linked incentive scheme, with a total disbursement of Rs 40,000 crore.
  • To support the ESDM sector and its development trajectory, the Government of India has made electronics production an important pillar of important initiatives like Make in India, Digital India, and Start-up India.
  • Government of India has allowed 100% Foreign Direct Investment (FDI) under the automatic route in the ESDM sector. In the case of electronics goods for defense, up to 49%, FDI is permitted under the automatic route. And more than 49% of FDI requires government approval.
  • In line with the 'Skill India' campaign, the Department of Electronics and Information Technology (DeitY) launched an initiative for capacity building in ESDM.
  • In April 2020, the Government of India approved three major plans to position India as a global hub for electronics system design and manufacturing (ESDM). The move is estimated to attract a minimum investment of US $ 6 billion in the country. Plans include production-linked incentive schemes, plans to promote manufacturing of electronic components, and semiconductor and modified electronics manufacturing cluster schemes.
  • The Tamil Nadu government unveiled the Electronics and Hardware Manufacturing Policy, which targets the US $ 100 billion in production by 2025 and 25% of India's total electronic exports by 2025.

Private investment in the electronic sector

  • From April 2000 to June 2020, FDI inflows into the electronics sector stood at the US $ 2.91 billion, according to the Department of Industry and Internal Promotion Trade.
  • In October 2020, the Tata group announced plans to invest Rs 5,000 crore to set up an Apple phone component plant in Hosur, Tamil Nadu.
  • In October 2020, Sahasra Electronics announced plans to invest Rs 350 crore over the next four years to assemble mobile phone memory chipsets, laptop hard drives, and motherboards in India with two new manufacturing facilities in Rajasthan and UP.
  • In October 2020, Aequs is committed to investing Rs 3,500 crore to set up a consumer electronics cluster in Karnataka.
  • In September 2020, Foxconn, Wistron, and Pegatron ( Apple's major suppliers) have committed to invest US $ 900 million in India over the next 5 years.
  • Investment is being made to increase capacity and domestic production of mobile phones for Apple and other brands.

The conclusion

Constantly increasing investment in the electronic sector will not only compensate for the economic loss of Corona but will also generate employment opportunities in the country. India's growing global credibility is also instrumental in establishing India as an investment destination.

General Studies Question Paper 3
  • Economy

Mains Question:-

  • According to some reports, India is capable of becoming the next investment destination in the electronic sector. In light of the statement, discuss the state of the electronic sector in India?