How Indiaʼs Semiconductor Push Could Boost Electronic Exports

India is making significant strides in the semiconductor industry, driven by ambitious investments and strategic initiatives like the Production Linked Incentive (PLI) and Design Linked Incentive (DLI) schemes. This push towards becoming a semiconductor powerhouse has profound implications for India’s electronic exports, positioning the country for a substantial increase in global market share.

Key Developments in India’s Semiconductor Sector

• $10 Billion Investment: The PLI and DLI schemes are fueling the establishment of chip and display fabrication facilities, attracting major investments to enhance India’s semiconductor manufacturing capabilities.

• 70% Import Cut: By reducing dependence on imported chips, India aims to cut its $24 billion chip imports by up to 70%. This reduction will significantly boost export competitiveness by decreasing production costs and enhancing supply chain resilience.

• $300 Billion Market by 2026: India is targeting a $300 billion electronics market by 2026, aiming to achieve global dominance in the sector. This ambitious goal is supported by rapid growth in electronics manufacturing and exports.

• Big Players Onboard: Major companies like Micron, TSMC, and Vedanta are strengthening India’s semiconductor supply chains. Their involvement underscores the country’s potential as a reliable manufacturing hub for global electronics.

Impact on Electronic Exports

• Enhanced Competitiveness: By reducing import dependency and leveraging domestic semiconductor production, Indian electronic exports will become more competitive in global markets.

• Increased Export Volumes: As India enhances its manufacturing capabilities, it is poised to increase electronic export volumes significantly. This growth will be driven by improved supply chain efficiency and reduced production costs.

• Diversification of Export Markets: With a stronger semiconductor base, India can diversify its export markets beyond traditional destinations, exploring opportunities in regions like Southeast Asia and Africa.

Strategies for Success

• Invest in R&D and Talent Development: Continuously invest in research and development to stay ahead in semiconductor technology. Training programs like the Future Skills Programme will be crucial for developing a skilled workforce.

• Strengthen Supply Chain Partnerships: Foster strong partnerships with global semiconductor leaders to integrate Indian manufacturers into global supply chains effectively.

• Leverage Trade Agreements: Utilize trade agreements to enhance market access and reduce tariffs on electronic exports, further boosting competitiveness.

In Summary

India’s push into the semiconductor sector is set to transform its electronic exports landscape by enhancing competitiveness, increasing export volumes, and diversifying markets. By leveraging strategic investments, partnerships, and trade agreements, India can achieve its ambitious goals in the global electronics market.

Sources:

1. https://www.orfonline.org/expert-speak/evaluating-india-s-pli-scheme-for-semiconductors

2. https://retail.economictimes.indiatimes.com/news/industry/electronics-goods-emerge-as-fastest-growing-segment-in-indias-exports/116679027

3. https://neosciencehub.com/india-set-to-chip-in-homegrown-semiconductor-revolution-by-2025/

4. https://www.angelone.in/news/india-first-indigenous-semiconductor-chip-to-begin-production-by-2025-stocks-involved

5. https://www.business-standard.com/technology/tech-news/first-made-in-india-semiconductor-chip-expected-by-2025-vaishnaw-125022501407_1.html

6. https://www.bisinfotech.com/semiconductor-industry-in-india-a-growing-export-powerhouse/