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India needs to maintain competitive edge in electronics manufacturing

India needs to maintain a competitive edge in electronics manufacturing and ensure that the space is not lost to some other country in the future; for instance, somewhere in Africa where labour might be cheaper, said a top Government official said on Wednesday.

“Today, we have the advantage of labour cost; the assembly of electronics units is heavily employment oriented; you’re able to employ a large number of people… but if it has to remain in India,we need to be competitive,” S Krishnan, Secretary, Ministry of Electronics and Information Technology (MeitY) said.

India has to ensure that at least a significant proportion of the components get manufactured in the country, he said.

Addressing the CII MSME Growth Summit, he said India still has, in certain segments, typically medium enterprises, which are manufacturing in the electronics sector that need to be encouraged to grow; likewise newer enterprises need to be started, so that components get increasingly manufactured.

“Our goal is that the value addition today which is at about 18 to 20 per cent, doubles to about 35 to 40 per cent in the next five years, and we are able to take forward the component manufacturing ecosystem; the role of MSMEs is going to be significant too,” he said.

PLI scheme
Krishnan noted that in the last production linked incentive (PLI) scheme for electronics hardware manufacturers, out of the 27 units which qualified, almost 20 are either small or medium scale. So, there is a big contribution that MSMEs can make; and they should be looking to utilise the opportunity.

He also said the ambition to grow is something which has now been built into the sector and growth is something that should be constantly attempted.

“There’s a national need to ensure that they succeed; we in MeitY are looking to see how we can promote components.; how we can promote greater manufacturing of electronics components in the country; how we can encourage industries of all sizes in electronics components manufacturing sector,” he said.

Mobile phone manufacturing
For instance, a mobile phone that gets manufactured here, is a significant achievement for this country. In 2014-15, he said 21 crore mobile phone units were imported, and India barely manufactured about five-crore mobile units.

“Today, we manufacture 33-crore mobile units… we export close to five-crore mobile units. So, almost the entire domestic consumption of mobile phones are manufactured or assembled in the country. But, we also need to be aware that only about 18 to 20 per cent of value addition takes place in that segment,” he added. The Hindu BusinessLine

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