• If today we are facing the concerns like shooting up of smartphone prices, delayed deliveries of electric cars, unavailability of gaming consoles like Xbox or playstation, although very different industries have on something in common- tiny computer chip or semiconductors for which there is a shortage worldwide • In simple demand supply economics, shortage needs to be seen as an opportunity and hence we are here today to analyse Electronics sector Email-nemaprakhar97@gmail.com for full matter of presentation

1. Electronics Sector
Prakhar Nema
MA Economics (II Semester)

2. Electronics industry under
Atmanirbhar Bharat
• Atmanirbhar Bharat or Self-reliant India campaign
• ESDM (Electronics System Design and Manufacturing)
• Definition of Electronics
• World Electronics Industry
– The electronics industry is one of the fastest growing
across the world, set to reach US$ 7.3 trillion by 2025.
– Applications across industries
– Why getting so popular?
– Issues

3. Electronics industry in India
• Evolution

4. Electronics Industry in India
• Current Scenario
o Contribution to GDP = 2.7%
o Exports- $11.7 billion (3.7% of total exports)
o Imports: $478 billion
o FDI: $2.91 billion
o Employment: 13 million
o CAGR = 25%
o Current location of industries
• Desired Scenario
– Turnover target = US $400 billion (Rs. 26L crores) by
2025
– Motive: to transform lives, businesses, and economies
across the globe.
– National Policy on Electronics 2019
• Enabling environment leading to higher value addition
• Developing core competencies in medical electronics
and telecommunication
• Promoting path breaking research to solve real life
problems
• Making India a circular economy with sustainable e-
waste management

5. Components of Electronics Industry

6. Answering the Why?
• Why India needs to boost electronics
sector?
 Increasing CAD
 Huge potential
 National security
 Employment opportunities
 Governance
• Why other countries are interested in
India?
 Ease of doing business
 Skilled and unskilled labour availability
 Increasing demand
 Government incentives
 China Factor

7. Government Initiatives
Production Linked
Scheme (PLI)
• Large scale Mobile & electronic components Manufacturing
• 4%-6% PLI for 5 years
• Outlay $5.5 billion
Scheme for Promotion
of Manufacturing of
Components and
Semiconductors
(SPECS)
• Domestic Electronics Supply Chain of Components (sub-
assemblies, semiconductors, advanced medical technology)
• 25% incentive on capital expenditures
• Outlay $440 million
Electronics
Manufacturing Cluster
Scheme (EMC 2.0)
• Infrastructure and Common Facilities
• EMC project: 50% of Project cost (Max 70 crores for 100 acres)
• Large manufacturing clusters. Eg: Electropreneur park at
Bhubaneshwar
• Outlay: $500 million

8. Government Initiatives
EODB
• Single window clearance- Invest India, National
Investment Promotion and Facilitation Agency
International
efforts
• Signatory to IT Agreement (ITA-1) of WTO
Other initiatives
• 100% FDI in ESDM sector
• Talent pool- private universities courses on chip
design + skill development & reskilling
• R&D promotion
• Sovereign Patent Fund-
• Customs Bonded Warehouse scheme
• Exemption in import duty on capital expenditure
• Credit Guarantee Fund
• Interest subvention of 4% on loans upto Rs.
1000 crores

9. Overall Impact of the government
initiatives
CAGR YOY
Exports 17% 34%
Imports 11% - 4%
Production 23% 16.5%
India’s share in global electronics
manufacturing grew from 1.3% (2012) to
3% (2018)

10. Scheme-wise: Impacts of
Government Initiatives

11. Challenges
• Resource
– No fully operational semiconductor fabrication plant
– Seen as assembly destination since low value addition
– Scarcity of Rare Earth elements
• Governance
– Taxation
• Inverted duty structure
• Uncertain tax regime
– Infrastructure: Improper supply chains leading to delays
– Red tapism
– Place of Origin in Assembly
• Competitors: Price wars
• Social: Creates Rural urban divide (low awareness, less accessibility)
• Workforce: Lack of technical know-how in India
• Costing: Complex value chain
• Environmental: e-waste management

12. Way Forward
• Focus on deep manufacturing
• Chinese model
• Increasing investments- Outlay of SPECS should be increased
• Promoting culture of research and development
• Skilling at all levels
• Acquiring mines of Rare Earth Minerals
• Competitive federalism
• Adopting Industry-wide global standards