New Delhi, 2024 – India’s economic landscape is undergoing a transformative shift, with the Budget 2024 heralding a new era. Poised to challenge China’s supply chain dominance, India is emerging as a formidable contender in the global market. The country’s strategic focus on diversifying supply chains and bolstering its electronics manufacturing capability plays a central role in this narrative.
Economic Outlook and Growth Trajectory
India’s GDP growth is forecasted to remain robust, exceeding 6.0% annually from 2023 to 2028. This positions India as a key player leading emerging markets and contributing significantly to global economic growth. The ongoing supply chain shift, coupled with the ‘Make in India’ initiative, underscores this momentum.
IT Hardware Market: A Catalyst for Change
The Indian IT hardware market, currently valued at around $9 billion, is projected to reach $25 billion by 2025-26. This burgeoning demand, however, is modest compared to the potential India offers. With the country generating approximately 20% of the world’s data but hosting only 2% of the world’s data centers, the government is focusing on retaining the data within national borders. This strategy aims to harness domestic data generation capabilities, thereby accelerating manufacturing growth.
Upskilling and Policy Initiatives
Advancing the electronics manufacturing sector necessitates upskilling the workforce and addressing production bottlenecks. The government’s investment in nurturing the ecosystem industries is crucial for growth and self-sufficiency in the sector.
Diversifying Global Supply Chains
The global shift towards diversifying component supply to new regions, including India, is gaining momentum. Over 1,000 Electronics Manufacturing Services (EMS) companies worldwide are exploring avenues to diversify supply chains, with India increasingly being recognized as a key player in enhancing supply chain resilience.
Investment and Growth in Electronics Manufacturing
India’s electronics manufacturing industry is currently valued at nearly $100 billion, employing approximately 2.5 million individuals. The government’s target is to achieve USD 300 billion in domestic electronics manufacturing by 2025–26. Notably, the PLI scheme for large-scale electronics manufacturing has already attracted investments exceeding the initial target set for FY24.
Demographics and Policy Framework
India, with a median age of 28, parallels China’s demographic landscape in 2008, highlighting its potential to emulate China’s growth trajectory in electronics manufacturing. The synergistic collaboration between central and state governments, and a conducive policy framework, have been instrumental in attracting manufacturing activities. India has emerged as the world’s second-fastest-growing market for laptops, tablets, servers, and data centres, trailing closely behind China.
In conclusion, Budget 2024 is not just a financial statement; it’s a strategic roadmap positioning India as a key player in the global supply chain, poised to shift the balance from China. With its robust economic policies, skilled workforce, and strategic initiatives, India is laying the red carpet for the world to witness a significant shift in the global supply chain dynamics.