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UAE remains top destination of India’s electronics exports

India posted a 34 per cent growth in its export of electronics goods and components during 2019-20, with the Middle East and the UAE maintaining their status as the top destinations, and underscoring the high priority the government has placed on the sector considered critical to its economic programmes.

A release from the Electronics and Computer Software Export Promotion Council (ESC) on Thursday showed that the year-on-year growth translated to a value of $11.283 billion, up from the $8.432 billion posted in 2018-19.

Telecom equipment was the top contributor with $4.8 billion, followed by electronic instruments, medical and office equipment ($3.059 billion), electronic components ($2.565 billion), consumer electronics ($513 million) and IT hardware ($346 million).

The export of electronics goods from India to the Middle East during 2019-20 is estimated to be $3.076 billion, which is 27.26 per cent of India’s total electronics exports.

“The export of electronics goods to the UAE has increased from $1.442 billion estimated in 2018-19 to $2.440 billion in 2019-20, registering a growth of 69 per cent. Telecom equipment, mainly mobile phones, is the largest item of export to the UAE during 2018-19 and 2019-20,” Kamal Vachani, the ESC’s honourary regional director in the Middle East, said in the statement.

India has made the electronics hardware manufacturing sector a priority, being one of the important pillars of the government’s ‘Make in India’ and ‘Digital India’ programmes.

In 2015, the government launched the Phased Manufacturing Programme (PMP) to support its mobile phone manufacturing industry. The PMP helped increase the share of locally-procured components in the manufacturing of mobile phones leading to the setting up of a “robust indigenous mobile manufacturing ecosystem” in the country.

India has emerged as the second-largest manufacturer of mobile phones in the world in 2019. Over 200 units are manufacturing cellular mobile phones and parts/components in the country, up from only two units in 2014. The domestic demand is almost completely being met out of domestic production; there were 420.7 million mobile phone Internet users in India last year, with this number expected to spike to almost 510 million by 2023, according to Statista.

Prime Minister Narendra Modi’s vision of Atmanirbhar Bharat (‘self-reliant India’) has planted the seeds for a new course of long-term development, and serves as the pivot on which India can emerge as a hub for manufacturing and investments. The value of electronics produced in the country hit an estimated $70 billion in 2019-20 from $29 billion in 2014-15.

Recently, the government launched three schemes to support the electronics industry of India. The Production Linked Incentive Scheme, proposing to offer a production-linked incentive of four to six per cent to boost domestic manufacturing and attract large investments in mobile phone manufacturing and specified electronic components, including assembly, testing, marking and packaging (ATMP) units.

The Scheme for Promotion of Manufacturing of Electronics Components and Semiconductors, on the other hand, will provide a financial incentive of 25 per cent on capital expenditure for the identified list of electronic goods that comprise downstream value chain of electronic products, such as electronic components, semiconductor/display fabrication units, ATMP units, specialised sub-assemblies and capital goods for manufacture of aforesaid goods, all of which involve high-value added manufacturing.

Electronics Manufacturing Clusters 2.0, meanwhile, envisages to create quality infrastructure (with minimum area of 200 acres) along with industry-specific facilities like common facility centres, ready-built factory sheds and plug-and-play facilities, among others.

Combined, the three programmes will enable large-scale electronics manufacturing, the domestic supply chain of components and state-of-the-art infrastructure and common facilities for large anchor units and their supply chain partners. These schemes are expected to contribute significantly to achieving a $1 trillion digital economy and a $5 trillion gross domestic product by 2025.

The ESC is continuing its efforts to enhance India’s electronics and IT export globally during the coronavirus pandemic. It has been continuously connecting its members with various electronics and IT companies across the globe through webinars and virtual B2B meets.

A number of global business match-making programmes are being planned by the ESC during 2020-21, both as virtual as well as in-person. In addition to the 21st edition of Indiasoft, the ESC will be organising the AIOT Global Expo in the first quarter of 2021.-Zawya

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