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India’s electronics sector experiences rapid growth

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Bangalore, known for IT, is also becoming a manufacturing hub for electronics. Phones are a major part of this, with companies like Apple and Samsung investing in the country. Indian companies like Tata and Dixon are also benefitting. The government’s incentives and support are encouraging more companies to manufacture in India, with hopes of surpassing China as the world’s electronics factory.

Electronics Manufacturing Boom in Bangalore: India’s Rise as a Manufacturing Powerhouse

Bangalore, known for its IT giants, is now making a name for itself in the electronics manufacturing industry. India’s efforts to transform into a manufacturing powerhouse are starting to bear fruit, with the production of electronics increasing significantly in recent years. The value of electronics produced in India has risen from $37bn to $105bn, accounting for 3% of GDP, between the fiscal years ending in March 2016 and March 2023. The government aims to triple this value by fiscal 2026, positioning India as a key player in the global electronics market.

The Phone Revolution: India’s Role in Electronics Manufacturing

One of the most significant areas of growth in India’s electronics industry is phone production. The country is now the world’s second-largest maker of phones, behind only China. Just a few years ago, India imported nearly four-fifths of its phones, but now it imports very few. Companies like Apple and Samsung have increased their production in India, with Apple now sourcing about one in seven iPhones from the country.

Foreign Investment and Expansion

Leading contract manufacturer Foxconn has been rapidly expanding its operations in India, now operating more than 30 factories and employing 40,000 Indian workers. Other foreign suppliers and manufacturers have also set up shop in India, boosting the local electronics industry. Even domestic companies like Tata and Dixon Technologies have joined the device-making bonanza, further driving the growth of electronics manufacturing in India.

Government Support and Future Outlook

India’s electronics boom is fueled by Western companies seeking alternative manufacturing hubs and a growing demand for devices among the country’s 1.4 billion people. Generous government incentives for manufacturers have also played a significant role in attracting companies to India. The government’s support has been crucial in promoting India’s manufacturing potential, with the hope of eventually challenging China as the world’s electronics factory.

Challenges and Opportunities Ahead

While India’s progress in electronics manufacturing is promising, there are still challenges to overcome. Investment in technical expertise and lowering trade barriers with neighboring countries are key areas that need attention. However, industry experts are optimistic about India’s potential to become a major player in electronic manufacturing, with companies like Dixon Technologies leading the way.

The Future of Electronics Manufacturing in India

Mr. Vachani of Dixon Technologies believes that India’s electronic manufacturing boom is akin to the Y2K moment for the country’s IT industry, signaling a significant turning point. As India continues to strengthen its manufacturing capabilities, it aims to establish itself as a major player in the global electronics market, potentially reshaping the industry landscape.

© 2024, The Economist Newspaper Ltd. All rights reserved.

From The Economist, published under licence. The original content can be found on www.economist.com

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