India To See Surge In Demand For Electronic Components To $240 Billion By 2030: CII

Anticipating the rise in demand, the report recommended the government implement a revised production-linked incentive scheme for electronic components with higher incentives in the range of 35-40%

Electronic components and sub-assemblies are anticipated to witness a surge in demand by the end of the decade, a report from the Confederation of Indian Industry revealed on Sunday. The report estimated that the demand for these components will grow more than five-fold to touch $240 billion by 2030.

Anticipating the rise in demand, the report recommended the government implement a revised production-linked incentive scheme for electronic components with higher incentives in the range of 35-40 per cent to help reduce the country’s reliance on imports. Notably, the increase in demand for components includes some crucial parts such as lithium ion batteries, camera module, motherboards, etc, which are majorly imported, reported PTI.

The data revealed that the data for components and sub-assemblies touched $45.5 billion in 2023 and supported an electronics production worth $102 billion. This demand, the report noted, is expected to reach $240 billion to support electronics production worth $500 billion by 2030.

The high priority components and sub-assemblies are estimated to increase at a strong compounded annual growth rate (CAGR) of 30 per cent and touch $139 billion by the end of the decade.

For India, the report said that components and sub-assemblies of camera modules, mechanicals, displays, lithium ion batteries, and PCSs remained of key importance as they collectively contributed to 43 per cent of the demand for components in 2022. This is projected to increase to $51.6 billion by 2030, the report added.

The report stressed that these components were either produced at a nominal level in India or remained heavily dependent on imports. It noted that the country would find it difficult to consistently import these components.

The report shared recommendations that the government should implement schemes to help provide fiscal support for certain components and sub-assemblies in the range of 6-8 per cent for the next 6 to 8 years.

Further, it proposed SPECS 2.0 to be launched and provide subsidies in the range of 25-40 per cent to help attract investors across brownfield and greenfield categories. It also urged the government to proactively seek free trade agreements (FTAs) with the UK, EU, GCC nations, and emerging countries in Africa.