India should aim $500 billion in electronics manufacturing by 2030: NITI Aayog

India should aim $500 billion in electronics manufacturing by 2030, NITI Aayog said in a report on Thursday, adding that such growth would create employment for about 6 million people.

In a report titled 'Electronics: Powering India's Participation in Global Value Chains', the Aayog said this ambitious target comprises $350 billion from finished goods manufacturing and $150 billion from components manufacturing.

As of FY23, India's electronics production stands at $101 billion. This comprises $86 billion in finished goods production and $15 billion in components manufacturing.

According to the report, India's electronics exports are expected to reach $240 billion and domestic value addition to increase to over 35 per cent.

"India's ambition to become the third-largest global economy necessitates a more ambitious vision for its technology-driven sectors.

"With a conducive business environment and robust policy support, including fiscal incentives and non-fiscal interventions, India should aim to achieve $500 billion in electronics manufacturing by value terms by FY30," the report said.

In a business as usual (BAU) scenario, the report noted that the projections indicate India's electronics manufacturing could escalate to $278 billion by FY30. This includes $253 billion from finished goods and $25 billion from components manufacturing. Employment generation is expected to grow substantially to around 3.4 million, with exports reaching $111 billion.

The report recommends strategic interventions across fiscal, financial, regulatory, and infrastructure domains to support this growth trajectory.

According to the report, these include promoting components and capital goods manufacturing, incentivising R&D and Design, tariff rationalisation, skilling initiatives, facilitation of technology transfers, and infrastructure development to foster a robust electronics manufacturing ecosystem in India.

India's electronics sector has experienced rapid growth, reaching $155 billion in FY23. Production nearly doubled from $48 billion in FY17 to $101 billion in FY23, driven primarily by mobile phones, which now constitute 43 per cent of total electronics production.

India has significantly reduced its reliance on smartphone imports, now manufacturing 99 per cent domestically, the report said.

The report emphasised scaling up production in established segments such as mobile phones and establishing foothold in component manufacturing.

Additionally, it said there should be a strong focus on diversifying into emerging areas such as wearables, IoT devices, and automotive electronics.

"This strategic diversification will capitalize on evolving consumer demands and technological advancements, positioning India as a leader in innovative electronic products on the global stage," it said.

As per the report, the global electronics market, valued at $4.3 trillion, is dominated by countries like China, Taiwan, the US, South Korea, Vietnam and Malaysia.

India currently exports approximately $25 billion annually, representing less than 1 per cent of the global share despite 4 per cent share in global demand.

To enhance competitiveness, India needs to localize high-tech components, strengthen design capabilities through R&D investments, and forge strategic partnerships with global technology leaders, the report noted.

Presently, India's electronics manufacturing primarily involves the final assembly of electronic goods. While brands and design firms have started increasingly outsourcing assembly, testing, and packaging tasks to Electronic Manufacturing Services (EMS) companies in India, the ecosystem for design and component manufacturing is at a nascent stage.

Releasing the report, NITI Aayog CEO BVR Subrahmanyam said India has been a part of the global value chain.

"Currently, India is a very very minor player as far as electronics manufacturing is concerned," he said adding certain types of components are just not made in India.