The recent budget has ignited profound conversations about the trajectory of India’s electronics industry. As the initial excitement subsides, experts and stakeholders are carefully unpacking the layers of policy changes and allocations, scrutinising the opportunities and challenges ahead. The government’s holistic vision, which interweaves skilling, infrastructure development, and digital transformation, is both ambitious and praiseworthy.
A cornerstone of this vision is the revised Credit Guarantee scheme for Micro, Small, and Medium Enterprises (MSMEs), a strategic move designed to bolster their capacity and stimulate production. In emerging sectors like electronics and semiconductors, this support is not just important—it is vital. These sectors form the backbone of India’s industrial future, and their growth is intertwined with the nation’s economic success.
The introduction of Employee-Linked Incentives in Manufacturing, particularly those that champion the inclusion of women, is another commendable step. The electronics sector has long benefited from a higher ratio of female employees, and by incentivising their participation, the industry stands to gain even more strength and resilience.
While reducing customs duties on PCBA is a boon for mobile manufacturing, it is imperative to take a broader view of the entire electronics manufacturing landscape. The delicate balance between market dynamics and procurement policies must be maintained to ensure that the benefits extend beyond mobile phones and contribute to the sector’s overall growth.
A sharp focus on component manufacturing is essential for the electronics industry to achieve sustainable growth and global competitiveness. Creating robust component ecosystems will serve as the bedrock for the industry’s long-term success, supporting the broader goals of economic development and technological leadership.
FTAs hold promise, mainly when they are structured to be mutually beneficial. Ensuring the availability of raw materials at competitive import costs and securing market access for “Made in India” is crucial. The government’s encouragement of investments in the component ecosystem will facilitate large-scale electronics manufacturing and strengthen India’s position in global markets.
In the realm of surveillance products, the budget’s allocation for IT manufacturing and Production Linked Incentives is a step in the right direction. With their pervasive presence in daily life, these products are particularly vulnerable to cyber threats. To safeguard citizens and ensure the integrity of these systems, future budgets should prioritise production incentives and investments in component quality and standardised testing.
Moreover, the government’s emphasis on AI-driven infrastructure management, especially for command-control centres and critical sectors like ports, is forward-thinking. Tax incentives aimed at fostering the adoption of artificial intelligence and machine learning across industries will accelerate innovation and efficiency. Investments in AI will also ensure a steady pipeline of skilled professionals who can drive advancements in diverse fields, from healthcare to urban planning.
Indian startups can potentially be the vanguard of the nation’s electronics manufacturing revolution. The value chain can be significantly strengthened by incentivising the development of high-quality components and directing government investments toward strategic areas. Simplified regulations, tax incentives, and enhanced infrastructure will further empower these startups to compete globally, driving innovation and excellence.
The Union Budget’s commitment to upskilling Indian youth and expanding higher education through financial packages and loans is transformative. The Prime Minister’s Package, encompassing five schemes with a budget of INR 2 lakh crore, is poised to boost employment and skills, setting India on the path to becoming a technology powerhouse. This focus on employment, upskilling, and middle-class support is not just a policy but a vision for India’s future as a global leader in key industries.
The increased funding for the Education Ministry will be pivotal in enhancing digital infrastructure, promoting skill-based learning, and fostering global education partnerships. These initiatives are especially crucial for educating the masses in Tier II and Tier III towns, laying the foundation for a more inclusive and empowered India.
Addressing the critical need for skilled manpower is another vital aspect of ensuring the country’s economic growth. Dedicated provisions for skill development and training programs will be instrumental in bridging the talent gap and equipping young professionals with the practical experience needed to drive the nation’s ambitious projects forward. By empowering the next generation, these initiatives will ensure that India’s progress is rapid and sustainable.
India’s electronics industry has already seen remarkable growth, with domestic production surging to USD101 billion in 2022-23, up from USD29 billion in 2014-15. This sector contributes around 3.4 per cent to India’s GDP and is a cornerstone of the nation’s economic development. The government’s vision to achieve electronics manufacturing worth US$300 billion by 2026 is a clear testament to its commitment to this critical industry.
Aligned with the vision of ‘Viksit Bharat,’ we remain steadfast in our dedication to driving economic excellence and creating opportunities across the ecosystem. Through accelerated growth and innovation, we are contributing to the nation’s prosperity and paving the way for a future where India stands tall as a global leader in electronics and beyond.
The author is Co-Chair, FICCI Private Security Industry Committee
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