India’s State Department of Electronics and Information Technology released a report this week examining how the subcontinent could boost electronics production by about 400 percent and exports by an ambitious 750 percent by 2026.

“The government is fully focused on meeting the goal of $300 billion in electronics production by 2026,” said Electronics and IT Minister Rajeev Chandrasekhar on Monday.

The target for electronics exports by 2026 is US$120 billion. The report was written in collaboration with the India Cellular and Electronics Association (ICEA). It was designed to help the government identify the challenges to achieve this hugely ambitious goal from where India currently stands: It currently manufactures $76 billion worth of electronic goods, of which only 16 Billions of dollars are exported.

Chandrasekhar remained optimistic that India would reach its goal thanks to what he described as “deep tectonic irreversible changes” that have sparked impetus and opportunity. After all, the country has “come a long way since 2014” when the domestic electronics industry essentially collapsed. However, he admitted that India would need to start exporting “aggressively” to meet those goals.

That report yourself [PDF] looks to China and Vietnam to see how these countries have managed to grow their exports to $900 billion and $100 billion, respectively.

“Based on the experience of successful electronics exporting nations, this study finds that the chances of success depend crucially on how the two major goals – exporting on a large scale to the world market (globalization) and increasing the proportion of domestic value creation (localization) – are pursued ‘ write the authors of the study.

The report acknowledges that without a competitive ecosystem of suppliers, India is unlikely to meet its target figures. It says the country should therefore follow in the footsteps of China and Vietnam in prioritizing exports, a tactic Chandrasekhar posited to jumpstart supply chains.

“We have always prioritized strengthening our domestic manufacturing ecosystem to make India more resilient to supply chain disruptions,” the minister said.

The authors came up with the slogan “Globalize first, then localize” and even called the paper “Globalize to localize: Exporting at scale and deepening the ecosystem are critical to higher domestic value creation in electronics”.

Indeed, moving beyond the slogan into action requires two fundamental policy changes, both of which touch on deregulation.

The first policy change proposal is to temporarily suspend localization requirements and tariffs while supporting free trade to allow India access to the world’s cheapest suppliers – at least until India’s electronics sector reaches global proportions.

The second change in policy concerns building the ecosystem of suppliers through “improving the business climate, removing unnecessary regulations, supporting technology transfer and supporting services, training workers, better sharing market information, investing in research and development, and targeting tax incentives – through cooperative Cooperation with the state governments and the private sector.”

The electronics sector is also the first recipient of India’s Production Linked Incentive (PLI) scheme. The program offers a total of $10 billion in subsidies divided up and used to cover the cost of building your own technology. Foxconn has already raised its hand and taken a part Exchange for the manufacture of semiconductors in India. Dell has decided It is in also for PCs and similar products, as well as many others. ®

https://www.theregister.com/2022/08/31/india_electronics_report/ India hopes to quadruple electronics business in just four years • The Register

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