India has Potential to Become Electronic Hardware Manufacturing Hub

According to a report by industry body MAIT, the country can ramp up its production quickly and contribute towards $5 trillion economy goal
India has Potential to Become Electronic Hardware Manufacturing Hub
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India aims its manufacturing sector to contribute 25% of the gross domestic product (GDP) by 2025 as part of the country’s plan to become a $5 trillion economy. However, at present 50% of the contribution made by the manufacturing sector comes from the automobile industry making it lopsided.

According to MAIT, a group representing India’s information and communications technology sector, the electronic hardware manufacturing sector has the potential to reduce dependence on the automobile sector—which is currently undergoing slowdown—and emerge as a healthy contributor to GDP.

The need for India to become an electronics manufacturing and exporting power is also necessary to reduce the country’s import bill as electronic import bill is the biggest next only to oil imports.

MAIT, in a report, reasons that an electronics export-led economy will also generate employment and increase labour productivity apart from ushering in technological progress.

India had introduced two frameworks in the last decade: Modified Special Incentive Package Scheme (MSIPS) in 2012 and Merchandise Export from India Scheme (MEIS) in 2015. While MSIPS was discontinued on December 31, 2018, MEIS was recently challenged at the World Trade Organization (WTO) and in all probability will be deemed to be inconsistent with WTO rules. These have put India at a disadvantage with other economies.

MAIT, therefore, believes it is essential that policymakers address the uncertainty surrounding these policies due to which investment decisions of large companies are on hold and devise alternative policies.

Here are some of India’s sector-wise potential in the electronic hardware manufacturing segment, according to MAIT:

Mobile Phones


Personal Computers

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