/PCBA manufacturing, exports from India can be more than $100 bn opportunities during 2021-26: ICEA-EY Report

PCBA manufacturing, exports from India can be more than $100 bn opportunities during 2021-26: ICEA-EY Report

Electronics Manufacturing

Printed Circuit Board Assembly (PCBA) exports can be the next great opportunity for India’s electronics exports after mobile phones and appropriate incentives are being recommended in line with the PLI scheme announced for mobile phones, according to India Cellular & Electronics Association (ICEA) Chairman, Pankaj Mohindroo.

“It is crucial to offset the disabilities vis-à-vis China and Vietnam and encourage industry players to set-up manufacturing facilities in India. Companies manufacturing in India suffer a disability due to inadequate availability of quality power, infrastructure and logistics; lack of domestic supply chain; high cost of finance; limited R&D etc,” the chairman said while releasing a report titled ‘Atmanirbhar Bharat: Making India the global hub for Printed Circuit Board Assembly (PCBA)’.

The report reflects the importance of PCBA manufacturing and highlights a $100 billion+ exports opportunity for India. It will also drastically reduce India’s dependency on China, which is currently the world’s largest exporter of PCBAs.

Consistent with Make in India and Atmanirbhar Bharat Abhiyan, the government had launched a trilogy of PLI, SPECS and EMC 2.0 schemes for attracting investments in mobile phone manufacturing. The incentives offered under the schemes have garnered significant interest from global as well as domestic manufacturers. However, the fact that the majority of mobile phone manufacturing comprises assembly operations at large, targeting the development of components ecosystem is a logical step to augment the manufacturing capabilities in the country.

“Over the past years, favourable policies and ecosystem collaboration have been pivotal in defining India’s mobile manufacturing prowess. The global demand for electronic products is evolving at an exciting pace, and India is emerging as a promising alternative for PCBA manufacturing. Now is the time to invest in the potential and embed electronics manufacturing in the fabric of ‘Make in India’ vision,” said Prashant Singhal, Emerging Markets TMT Leader, EY.

“The right policy impetus on PCBA can go a long way in transforming India from mobile phone assembly to full-fledged electronics manufacturing hub. By extending enabling policy incentives to PCBA manufacturers, India can strengthen its position in the global supply chain and fast-forward the ‘Atmanirbhar Bharat’ vision with $109 billion export potential in the next five years,” he added.

The report cites that a PCBA is at the core of every electronic device such as mobile phones, tablets, computers, routers, televisions, washing machines, refrigerators, air conditioners etc. and is often called the heart of an electronic device. Moreover, PCBAs constitute a significant portion of the cost of an electronic device and range from 10 per cent to 50 per cent of Bill of Materials (‘BoM’).

Considering the cost implications and their ubiquitous use in electronic devices, the report emphasizes that development of manufacturing capabilities for PCBA is a must for a holistic electronics manufacturing ecosystem. Incorporating the insights of industry players, the report provides perspective on the benefits of transforming India into a PCBA exports hub. The illustrative list includes reduced imports, decoupling from China, better trade balance including with China and the gradual development of core SMT technology in India.

ICEA estimates that PCBA manufacturing can lead to backward integration and development of components ecosystem in India. However, it also cautioned that a successful setup of PCBA manufacturing base In India would require addressing of disabilities adding to the costs for manufacturers.

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