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Electronics companies poised for significant revenue growth

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In Short:

India’s domestic electronics manufacturing services industry revenues are predicted to double to $55 billion by FY2027. Global companies like Apple, Samsung, and Lenovo are expected to expand in India. The industry is set to account for a growing proportion of global revenues. Policy continuity and new initiatives like the PLI scheme are crucial for sustained growth. The industry is proposing a PLI scheme for components and sub-assemblies to boost domestic value addition.

India’s Electronics Manufacturing Services Industry Set to Double Revenues

The domestic electronics manufacturing services (EMS) industry in India is projected to witness a significant growth with revenues reaching $55 billion by FY2027. This surge is attributed to the increased sourcing of components locally, coupled with the expansion plans of global giants like Apple, Samsung, and Lenovo in the Indian market.

A recent report by BNP Paribas indicates that Apple is planning to invest $40 billion in the next 4-5 years to ramp up its production capacity in India, while Samsung aims to expand its manufacturing footprint by producing laptops in addition to smartphones. Lenovo, on the other hand, is strategizing to manufacture servers in India to support its growing data center business under the production-linked incentive (PLI) scheme for IT hardware.

Expanding Global Presence

In addition to these key players, companies like Acer, HP, and Nokia are also looking to enhance their presence in India, as mentioned in the report by BNP Paribas.

The report predicts a remarkable growth trajectory for domestic EMS players, with the total addressable market expected to reach $100 billion by FY2027, propelled by the decline in imports of finished goods and the increase in component production.

Call for Policy Continuity

Industry experts emphasize the importance of policy continuity to sustain this growth momentum. There is a consensus on the need for new initiatives like a PLI scheme for components and wearables to further boost the industry and foster innovation.

Pankaj Mohindroo, Chairman of India Cellular and Electronics Association, highlights the necessity for a mission-mode approach to meet the ambitious target of quadrupling the sector’s output in the next five years. This would require cohesive efforts across ministries and active engagement with industry leaders.

Furthermore, the proposal for a Rs 30,000-35,000 crore PLI scheme for components and sub-assemblies aims to enhance domestic value addition from the current 18% to 35-40%.

Ashok Chandok, President of India Electronics and Semiconductor Association, stresses the importance of evaluating proposals for setting up semiconductor fabs and providing continuous support to the industry. He advocates for a focus on creating a robust component ecosystem and supporting local product design through R&D initiatives.

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