It is a great pleasure to be with you today along with our valued friends at HSBC in connection with our report and a discussion on electronics manufacturing in India. Great to be here with Mr Marwah, Mr Pankaj and senior officers of the Ministry of Electronics and the Government and my friend Surendra Rosha and the HSBC team — and other friends from industry.
This event is of significance as India is today the second-largest telecom market globally – with over a billion subscribers and over 743 million internet users.
A key driver of this growth is mobile handsets especially Smartphones which account for about 70 percent of all mobile phone subscriptions globally. India has emerged as the second largest mobile manufacturer globally after China. The annual production of mobile phones in India has increased 5 times in the last five years, with a manufacturing base valued at INR 2,250 billion in 2019-20.
The manufacturing sector in India is witnessing accelerated transformation with supportive reforms and government policies and advantageous geo-political dynamics. The pandemic has accelerated the reconfiguration of global supply chains. Electronics is at the heart of the world trade and with the current government’s focus on this sector, India is strongly poised to be the become a global leader in the handset, components and electronics manufacturing industry.
India’s GDP has grown at a fast pace adding USD1 trillion in just the past five years. Today, with a 500 mn strong labour force, liberal FDI policies, growing digital footprint, large domestic market and improving infrastructure, India is an increasingly attractive destination for manufacturers. Electronics is a highly promising sector with demand for electronics hardware expected to reach USD400 billion by 2025.
Currently, mobile handsets and electronic components contribute 51% of the electronics production in India. With the increase in the use of smartphones, uptake of smart homes and smart cities, this contribution is set to expand further. Our study reveals that there is a huge potential in the market that can be addressed by the OEM, component manufacturers, and even leading brands looking to enter this space.
The growth of the Indian economy is intricately linked to the growth of the telecom sector. Investors, telcos, industry bodies, businesses, expert work groups and government must come together to work on implementation challenges to catalyze India’s digitalization roadmap, creating an enabling environment and regulatory enablers for powering up electronic manufacturing in India.