India’s electronics manufacturing goal

Source: The post India’s electronics manufacturing goal has been created, based on the article “India’s $500 billion opportunity — and how not to lose it” published in “Indian Express” on 17th October 2024

UPSC Syllabus Topic: GS Paper 3– Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.

Context:  The article discusses India’s ambitious goal of reaching $500 billion in electronics manufacturing by 2030. It emphasizes the need for regional clusters to support growth, customized regulations, and devolution of powers to local authorities to create competitive manufacturing environments.

For detailed information on Semiconductor Industry in India read this article here

What is India’s electronics manufacturing goal?

1. Prime Minister Narendra Modi set a target of $500 billion (Rs 4.20 lakh crore) for electronics manufacturing by 2030.
2. This target is bold, as India’s total manufacturing output in 2023-24 was only $660 billion (Rs 55.4 lakh crore). Growth in electronics manufacturing can help create jobs.

What Strategy is Needed to Meet This Target?

1. The government plans to focus on export-led growth.
2. This involves developing competitive regional manufacturing clusters, similar to those in Silicon Valley, Taiwan, and Shenzhen.
3. Regions like Sriperumbudur in Tamil Nadu and Noida in Uttar Pradesh are already key players, contributing nearly 50% of India’s electronics exports.

What factors make successful manufacturing regions?

Three main factors are crucial:

1. Large Size with Anchor Investors: Successful regions are large and have major companies that drive growth. For example, Shenzhen in China covers 2,000 square kilometers and exports around $350 billion.
2. Customized Regulations: These include favorable labor laws and taxation policies that facilitate easy movement and management of components across borders.
3. Devolution of Power: Local authorities need the power to make decisions quickly and efficiently, catering to the needs of the manufacturing sector.

How Can India Implement These Changes?

1. It is suggested to develop around existing manufacturing clusters by declaring large special regions. This would integrate current factories and new parks.
2. Regulations should be adjusted to attract major global players and streamline processes. The example of GIFT city, a differentially regulated zone for financial services, shows that such models can work in India.
3. By focusing on these strategic areas, India aims to transform its electronics manufacturing sector and meet its ambitious 2030 target.

Question for practice:

Examine the strategies and factors necessary for India to achieve its $500 billion electronics manufacturing target by 2030.