ICEA, the premiere industry association representing cellular and electronics manufacturers, has welcomed the NPE 2019 which was recently approved by the Union Cabinet targeting a turnover of $400 Billion by 2025 promoting domestic electronics manufacturing.
ICEA has been engaged in the extensive public consultation process undertaken by the government to formulate this forward looking and progressive policy document. NPE 2019 aims to make India a global hub for exports and components manufacturing in the cellular mobile sector, and enhancing its competencies in other parts of the ESDM sector, including R&D, chip design, medical electronics, automotive electronics, and strategic sectors such as IoT and AI etc.
Pankaj Mohindroo, Chairman, ICEA, said, “NPE 2019 is a truly visionary document. It takes stock of the achievements of this sector under Prime Minister Modi’s leadership, acknowledges the areas where work is needed and lays down the vision for the future – with special emphasis on incentive-linked policies to build India’s export prowess. The industry will put together a National Action Plan (NAP) and work with the government to ensure its successful implementation.”
The Policy registers the successes that India has had since 2014, wherein electronics hardware production has increased from Rs.1,90,366 crores in 2014-15, to Rs.3,87,525 crores (US$59 billion) at the end of 2017-18 – a remarkable compounded annual growth rate of 26.7% against a mere 5.5% in 2014-15.
The mobile handsets manufacturing industry has played a major role in the overall growth of the electronics sector in India. Its value rose 7 times from Rs.1.32 lakh crores in just the past 3 years with the total production up from 60 million units in 2014-15 to 225 million units in 2017-18.
ICEA also welcomes the shift in focus while building on the fundamentals. The new Policy places exports and incentives to support such exports in the electronics industry, and especially the mobile sector, front and center of NPE 2019. The Policy expects the mobile sector to contribute 190 billion of the 400 billion sector by 2025. Further, nearly 60% of the mobile sector (US$110 billion) will come from exports alone.
The Policy also outlines a welcome move to incentives, single window clearance, special governance structures and review of existing initiatives to achieve these objectives.
ICEA, however, suggested that specific instrumentalities and a National Action Plan to achieve not just the overarching vision, but also the key objectives outlined in the Policy.
Even though the sector has seen 268 factories come up within the last 5 years, there are several unintended regulatory risks that plague the sector and could become a big barrier between the objectives outlined in the Policy and their achievement.
For India to become a global hub for mobile phone, components and sub-assembly manufacturing and reach its true export potential, several specific steps need to be undertaken. These include a high-powered decision-making body which will serve as a single window and can coordinate across key Ministries; a time bound redressal of issues; a need to acknowledge India’s disabilities vis-a-vis competing destinations; and tailored incentives to help shift global ecosystems to India and build Indian champions who can address this global opportunity from India.
“ICEA plans to reach out to the government with a proposal for a National Action Plan that will articulate the special initiatives, incentives and timelines for implementation, which will help NPE 2019 realize its full potential by 2025”, added Pankaj Mohindroo.