India's Electronics Manufacturing Sector Experiences Significant Growth, Says RBI

New Delhi, Jul 20 (KNN) The Reserve Bank of India (RBI) has reported a substantial increase in India's electronics production, which now accounts for 3 per cent of the country's GDP in 2023-24, according to its July 2024 monthly bulletin.

The value of electronics produced in India has more than tripled from USD 37 billion in 2015-16 to USD 115 billion in 2023-24.

The RBI bulletin states, "India's efforts to transform into a manufacturing powerhouse are already bearing fruit - electronics manufacturing."

The central bank has set an ambitious near-term objective to triple electronic production by 2025-26.

Currently, India's share in global electronics production stands at 3 per cent, growing faster than any other country. Mobile phones dominate the sector, constituting 43 per cent of total electronics production.

In 2023-24, India exported USD 15.6 billion worth of mobile phones, with an additional USD 1.5 billion exported in April 2024 alone.

Global tech giants are increasingly turning to India for manufacturing. Apple now sources approximately one in seven of its iPhones from India, doubling its production in the country over the past year.

Samsung, a major competitor, has established its largest phone-making facility in India.

A report released by Niti Aayog on July 18 provides context to India's growth in the global electronics market, estimated at USD 4.3 trillion.

While China remains dominant with a 60 per cent market share, India's production is rapidly increasing, although its current market share is relatively small at 3.3% of the global market.

The RBI report emphasizes the importance of expanding manufacturing to boost India's share of world exports from the current 2.4 per cent to at least 5 per cent.

Based on exports of nearly USD 780 billion in 2023-24 and a cumulative growth rate of 10.2 per cent in the first quarter, the RBI projects that India is well-positioned to achieve exports exceeding USD 800 billion in 2024-25.

Government initiatives such as Make in India and Digital India, coupled with improved infrastructure and ease of doing business, have played a crucial role in attracting foreign investment and promoting domestic manufacturing.

As a result, India now manufactures 99 per cent of its smartphones domestically, significantly reducing its dependence on imports.

However, challenges remain. India's electronics sector primarily focuses on assembly, with limited capabilities in design and component manufacturing.

Niti Aayog recommends localising high-tech component production, enhancing design capabilities through increased R&D investments, and forming strategic partnerships with global tech leaders.

To ensure sustainable growth in electronics manufacturing, Niti Aayog advises the industry to promote skill development, improve industrial infrastructure, foster innovation and research, and create a conducive ecosystem.

(KNN Bureau)