GS3 – Indian Economy
Context
India’s electronics exports have crossed $40 billion, showing an eightfold increase over the past 11 years.
Current Status:
- Q1 FY26: Electronics exports surged 47%, touching $12.41 billion (IBEF data).
- Key Destinations: USA, UAE, China, Netherlands, and Germany.
- India ranks second globally in mobile phone manufacturing.
- The goal is to reach $300 billion in electronics production by 2026.
Drivers of Growth:
- Rising global demand, particularly from the US and Europe.
- India’s growing integration into the global supply chain.
- Policy incentives under PLI schemes and industrial upgrades.
- Strong workforce base and product diversification.
Challenges:
- High dependency on the USA (60.17%) increases geopolitical risks.
- Supply constraints: Lack of rare earth materials and high capital investment needs.
- Skill gap: Absence of sector-specific training for electronics manufacturing.
- Low value addition: Predominance of assembly operations.
- Global uncertainties: Trade tensions and protectionism affecting market stability.
Way Forward:
- Diversify markets: Build trade relations with Japan, South Korea, and the EU.
- Boost semiconductor infrastructure through PPP models.
- Negotiate tech-sharing pacts with countries like the US and Japan.
- Enhance regional influence by leading resilient supply chain initiatives (e.g., SCRI).