India Advances Electronics Manufacturing with Focus on Component Production

India is preparing to move into the next stage of its electronics manufacturing journey which will emphasize the actual production of electronic components, as stated in a report by Phillip Capital. In comparison, the initial stage, EMS 1.0, focused mainly on assembling electronic parts.

The report emphasized that the government is developing a new Production Linked Incentive (PLI) scheme for electronic components. The objective of this plan is to reach a value addition of 35-40 percent, effectively doubling the existing levels of 18-20 percent obtained through the current electronics manufacturing incentive initiatives.

The report said, "In the first phase of India's electronics manufacturing push, or EMS 1.0, is mainly for assembling electronic components, while the second phase, or EMS 2.0, will mainly deal with the actual manufacturing of electronic components."

Once put into effect, the new PLI scheme is anticipated to foster long-term value enhancement, positioning India as a more competitive hub for electronics production. This change will focus on components sourced locally, minimizing reliance on expensive imports that are frequently affected by tariffs and other difficulties.

The report additionally highlighted that although India has achieved considerable advancement in electronics assembly, especially within the mobile and consumer electronics sectors, it still depends largely on imports for manufacturing and designing components. Thus, EMS 2.0 will concentrate on that area. Although the country thrives in final assembly and sub-assembly operations, its restricted abilities in component manufacturing continue to pose a challenge.