Ashwini Vaishnaw, the minister of communications and IT, told the press that the government is developing a plan for an export-led growth for smartphones and electronics after seeing success in homegrown mobile manufacturing.
India is now a component of the global value chain (GVC) for electronics and mobile phones. Rather than just substituting imports, we are now considering an export-led growth strategy while also considering our needs, Vaishnaw added. “We have arrived at a point where we can quickly expand our exports and a great opportunity has presented itself to us,” he continued.
The Ministry of Electronics and IT (Meity) will collaborate closely with the Ministry of Finance to facilitate seamless cross-border goods movement, which is expected to drive growth in the export-led market for mobile phones and electronics. According to Vaishnaw, this is necessary because the nature of GVC requires goods to cross borders several times before the finished product is produced. “In this process, speed is crucial,” he continued. According to him, import duties, procedures, automation, and warehousing are all things that need to be examined in order to facilitate numerous cross-border transactions.
The minister makes some very pertinent and timely observations. Vietnam is an example of a country with a $2 billion domestic market for electronics and mobile phones, but $40 billion in exports.
India’s exports as of FY23 were worth $11 billion, despite the country’s $33 billion domestic market. There is therefore a tonne of room to grow.
According to Vaishnaw, India has advanced to a point where the ecosystem of its native components is beginning to take shape. According to him, components for electronics manufacturing must reach a certain volume before they can be sourced domestically. “We’ve crossed that threshold. We can confidently state today that domestic manufacturing of nearly 30% of components (in volume terms) has begun, and this percentage will continue to rise quickly, according to Vaishnaw.
He made reference to India’s rapid development of a domestic ecosystem, pointing out that in 25 years, China’s domestic value addition in the electronics manufacturing chain is 30–40% in value terms, while Vietnam’s is 20–25% over the same period. “We are pretty close to Vietnam in terms of value terms—India’s domestic value addition is about 15–18% in 9 years,” Vaishnaw stated. The primary factor increasing the value of domestic value addition is semiconductors.
According to the minister, the important thing is to determine when a nation joins a GVC, which India has already done.
What’s remarkable, according to Vaishnaw, is that India has become the starting point for exports of a number of components, including mechanicals, chargers, PCB assemblies, etc.
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