- Saturday, November 23, 2024
Following the unexpectedly close outcome of the election results, concerns arose about potential delays in industry subsidies due to a possible change in government but they died down later.
By: Shubham Ghosh
AS prime minister Narendra Modi-led National Democratic Alliance (NDA) government gears up for its third consecutive term, industry stakeholders are anticipating a significant uptick in the electronics manufacturing and semiconductor chip sectors over the next five years.
Calling the election verdict as one of “stability and continuity”, Ajay Chowdhry, co-founder of Indian information technology giant HCL, said the policies of the incumbent government have given much thrust to economic development besides fast-tracking infrastructure development.
“To my mind, the next five years will prove to be pivotal in the way that India’s position on the world stage evolves and aids in putting the country on the global map as a product nation in areas of electronics, semiconductors, space tech, EVs, drones, medtech, etc. This is our time to develop design and manufacturing capabilities thereby reducing dependence on China,” he was quoted as saying by Moneycontrol.
Read: Corporate sector expects reform in Modi’s third term: Aghi
Chowdhry also said that over the past decade, Indian companies have undergone a revitalization journey, buoyed by Modi’s call for Aatmanirbharta (self-reliance), which has been warmly received and translated into tangible actions on the ground.
It is now crucial to shift gears and prioritize value-added manufacturing alongside ‘designed in India’ products, he said, to establish India as a hub for creating global brands.
Read: US-India business body congratulates Modi on election victory
“I am sure the government will take decisive steps in taking forward its economic agenda and steer the country to greater heights,” the top HCL official was quoted as saying.
During the previous term of Modi which concluded on Wednesday (5) with Modi resigning, his government unveiled a $10 billion (Rs 76,000 crore) semiconductor package, earmarked for entities such as the Tata Group, CG Power, and Micron for establishing chip plants.
In recent months, senior officials have hinted at a forthcoming package aimed at bolstering the entire spectrum of semiconductor chip designing and manufacturing on Indian shores.
Following the unexpectedly close outcome of the results, concerns arose about potential delays in industry subsidies due to a possible change in government.
However, the return of the NDA government has restored confidence, reflected in the stock market’s stability.
Dixon Technologies, a beneficiary of Modi’s policies supporting electronics manufacturing, initially saw a 12 per cent drop in stock. Later, with renewed NDA support, its stock recovered, rising over six per cent.
Dixon, which assembles phones for brands such as Xiaomi, is reportedly negotiating a partnership with Google for Pixel phones, further bolstering investor optimism.
“The results were slightly surprising, but there will be no impact on manufacturing in the electronics industry… There is a national consensus that the impact of this industry on the economy is huge. We expect PLI (production-linked incentive) schemes to continue to play their part to help various segments within the industry,” a top executive at a leading electronics manufacturing services (EMS) company was quoted as saying by Moneycontrol.
The Modi government has outlined an ambitious target of achieving $300 billion in electronics production by 2025-26. To entice device manufacturers seeking to expand their manufacturing beyond China, it has also introduced lucrative incentives under its PLI schemes.
“Over the past five years, the administration has implemented economic reforms fostering growth, particularly in the semiconductor and electronics sectors. We anticipate this trend will continue, contributing to the VIKSIT Bharat vision and making India a developed nation by 2047,” Ashok Chandak, president of the India Electronics and Semiconductor Association, was quoted as saying.
In the recent year, Apple has significantly boosted its local production of flagship iPhone devices in India. The Cupertino-based tech giant is purportedly aiming to elevate production in India to exceed $40 billion within the next four to five years, following its achievement of surpassing the $7-billion production milestone in the previous fiscal year.
“This is an industry where it’s very important to create a critical mass. We have crossed that threshold now with $100 billion of electronics production and $44 billion of mobile phones. Today, we are in a position where we can move away from the import-substitution model and move on to an export-led model,” Ashwini Vaishnaw, the ministry of electronics and information technology minister in India’s second Modi government, was quoted as saying.
