India Preps to Challenge Chinese Manufacturing in a Post-Corona World

Mobile Manufacturing

In the Budget session of the Parliament, the Cabinet approved two schemes associated with electronics manufacturing in India. Production Linked Incentive Scheme (PLI) for Large Scale Electronics Manufacturing and Modified Electronics Manufacturing Clusters (EMC2.0) schemes were passed in the parliament.

Crux of the Matter

EMC2.0 as the Support System
Through the development of infrastructure and common amenities, this scheme would help in the development of the Electronics System Design and Manufacturing (ESDM) sector and an entrepreneurial environment in electronics manufacturing.

It will aid in setting up Electronics Manufacturing Clusters in certain geographical areas, and Common Facility Centre (CFC) in industrial parks, etc at a cost of ₹3,762.25 crores. The following benefits can be yielded out of the Scheme:

  • It will create a robust infrastructure with Plug & Play offices.
  • It will bring new investment in the electronics sector.
  • It will create new job opportunities in the electronics manufacturing sector.
  • It will generate revenue, in the form of taxes, for the government as well.

“Assemble in India for the World”
PLI scheme is aimed at boosting domestic manufacturing and investment in specified electronic components including ATMP (Assembly, Testing, Marking, and Packaging) units and mobile production. It will achieve this through a production linked incentive in which it will extend a 4-6% incentive on incremental sales of Indian-made goods over a period of 5 years. It is likely to benefit 5-6 global players and a few domestic electronics manufacturers.

The government has set aside a sum of ₹40,995 crores for this scheme. It is estimated that the scheme will generate 2 lakh direct jobs. India produced ₹1.70 lakh crores worth mobile phones in 2018-19. With the conflux of this ‘Assemble in India for the World’ and ‘Make in India’, India aims to boost its electronic production.

New World Leader
Coronavirus may have hampered the growth of Chinese manufacturing as many world nations are mulling over sanctioning China. After the USA-China Trade War, now Coronavirus may have a lasting impact on the Chinese industry. India’s production boost, especially in the electronics and mobile manufacturing, can put India abreast of China. India can see this as an opportunity to become a manufacturing hub for multinationals, besides definitely encouraging domestic production.

Curiopedia

The electronics industry in China grew rapidly after the liberalization of the economy under the national strategic policy of accelerating the “informatization” of its industrial development. Manufacturing was the sector that grew the fastest. Major Chinese electronics companies include BOE, Changhong, Haier, Hisense, Huawei, Konka, Lenovo, Panda Electronics, Skyworth, SVA, TCL, Xiaomi, Oppo, DJI and ZTE. China’s production recorded the largest world market share for its electronics exports in 2016. It also recorded high volume outputs across a wide spectrum of consumer electronics; between 2014 and 2015—according to China Daily—286.2 million personal computers (90.6% of the global supply), 1.77 billion phones (70.6% of global supply of smartphones) and 109 million units (80% of global supply of air conditioners) were produced. More Info

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