Evaluating multiple EoIs for OSATs, fabs, modernizing SCL: Rajeev Chandrasekhar
₹10,000 crore—more than $1 billion (about ₹8,300 crore) —and I don’t think we’ll need to take that figure up further. Will local electronics manufacturing in India need concerted efforts to create a component supply chain now, given that we’re assembling a sizeable amount? Even China, which controls 70-72% of the global value chains (GVCs), makes a value addition that is in the low two-digits. Even they, for exports exceeding $1 trillion, import $650-700 billion in components.
To be in the GVC of electronics is a low-margin, high-volume game—unless you’re in the strategic electronics space, where it is low-volume and high-margin. But consumer technology, which includes mobile phones, laptops, tablets, etc., is effectively characterized by low margins—not as low as 1%—but very high volumes. That scale, when you reach, allows you to develop an ecosystem of suppliers and supply chain for electronics.
We’re now reaching the tipping point of scale, size and volume. Now, we’re seeing suppliers wanting to come in and set up shop here. We’ll consider it at the right time, because we certainly don’t want to offer double the subsidy for the same product.
One important thing to understand is that we’re building this industry for exports as well as domestic supplies. Unlike automotive, which only exports 3-4% of what is made locally, or even white goods, for electronics we’re designing local manufacturing to be competitive in exports. Our target for electronics manufacturing is $300 billion by 2026, of which nearly $120 billion, or 40%, will be in exports.
Hence, the electronics manufacturing sector must grow faster than the growth of the domestic market. We’re close to around $90 billion by end-2023. Now, there are a couple of
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