Indian Electronics Manufacturing Sector Poised to Reach $115 Billion in 2024: ICEA

New Delhi, India, Jan 02, 2024: The Indian electronics manufacturing sector is gearing up for a substantial growth of 15%, set to be valued at USD 115 billion in 2024. Industry players are strategically emphasizing higher value addition in components and product development to fuel this impressive trajectory.

The poster child of India’s electronics manufacturing, mobile phone production, is projected to exceed USD 50 billion by March 2024, showcasing a substantial increase from around USD 42 billion in the previous fiscal year. Google’s Pixel smartphone production, commencing in India from the first quarter of 2024, will mark the comprehensive manufacturing presence of all global majors in the country.

Pankaj Mohindroo, Chairman of the India Cellular and Electronics Association (ICEA), forecasts that the total production of electronic goods in the financial year 2023-24 will reach USD 115 billion, propelled by a remarkable contribution from mobile phones expected to surpass USD 50 billion.

Data from the government reveals that domestic electronics manufacturing has surged over four-fold to INR 8.22 lakh crore or USD 102 billion in the last decade, up from INR 1,80,454 crore (USD 29.8 billion) in FY14.

Mohindroo anticipates mobile phone exports to reach USD 15 billion in FY24, registering a robust 35% growth over the last fiscal year. According to ICEA estimates, mobile phone exports have already surpassed USD 9 billion during the April-November period of this fiscal, compared to USD 6.2 billion in the same period last year.

Focusing on deep manufacturing and enhanced localisation, Mohindroo notes that the mobile phone industry has achieved near self-reliance in Printed Circuit Boards Assembly (PCBAs), chargers, battery packs, and cables.

The government’s efforts to establish a semiconductor ecosystem witnessed a breakthrough with a USD 2.75 billion project by global memory chip maker Micron. However, the unexpected breakup of the Vedanta-Foxconn joint venture for a proposed semiconductor plant posed a challenge, and both entities are now independently working to set up semiconductor plants.

Several entities, including Tata Electronics, Foxconn, and HCL Group, have submitted applications to set up chip plants. The semiconductor industry is critical, given that chips are a costly and essential component for modern electronic devices.

ELCINA estimates the electronics component manufacturing base in India is valued at over USD 11 billion, while demand exceeds USD 40 billion. In the past, Rajoo Goel, Secretary General of ELCINA, called for a special scheme for other components to complete the ecosystem, highlighting challenges faced by PLI schemes in supporting component manufacturing due to capital investment ratios.

Beneficiaries of the telecom PLI scheme, GX Telecom, underlined the industry’s focus on localisation, with increased investment plans to ensure the localisation of the value chain. The electronic manufacturing services segment experienced a significant boost, with domestic players like Dixon Technologies, Syrma SGS Technology, and Optiemus Electronics gaining prominence, formerly dominated by foreign EMS firms like Foxconn and Flex.