India needs to enhance its participation in global value chains (GVCs), which account for 70% of global trade, to establish itself as a leading manufacturing hub for electronics, according to a report published by the policy think tank NITI Aayog.

Titled “Electronics: Powering India’s Participation in Global Value Chains,” the report outlines an ambitious target of $500 billion in electronics manufacturing by the fiscal year 2030.

The report notes that India’s electronics industry has seen rapid growth, reaching $155 billion in FY23. Production has nearly doubled from $48 billion in FY17 to $101 billion in FY23, with mobile phones being a major driver, accounting for 43% of total electronics production.

While India has made significant progress in reducing its reliance on smartphone imports – now manufacturing 99% of phones domestically – the country’s electronics market remains relatively small, representing just 4% of the global market. Current exports stand at about $25 billion annually, less than 1% of the global share.

The report proposes that India should aim to manufacture $350 billion in finished goods and $150 billion in components by FY30. Achieving this goal is expected to create between 5.5 million and 6 million jobs, significantly boosting employment opportunities across the country.

To meet these targets, the report recommends strategic interventions across fiscal, financial, regulatory, and infrastructure domains. Key recommendations include promoting component and capital goods manufacturing, incentivizing R&D and design, rationalizing tariffs, implementing skilling initiatives, facilitating technology transfers, and developing robust infrastructure.

The report underscores the need to expand production in established segments such as mobile phones and to strengthen capabilities in component manufacturing. It also calls for diversification into emerging areas like wearables, IoT devices, and automotive electronics.