India capable of starting FAB manufacturing: ICEA

New Delhi India capable of starting FAB manufacturing: ICEAAs the Indian government renews its thrust on domestic electronics manufacturing with various incentive-linked schemes, the country has a great opportunity as well as required capabilities to establish a full-fledged semiconductor fabrication (FAB) electronics manufacturing ecosystem in the country, the India Cellular and Electronics Association (ICEA) said on Wednesday. India's share in the global electronics manufacturing has grown from 1.3 per cent in 2012 to 3.6 per cent in 2019. Domestic electronics manufacturing has increased substantially from Rs 1.90 lakh crore in 2014-15 to Rs 5.34 lakh crore in 2019-20, growing at a compounded annual growth rate of 23 per cent.

However, there is still a lot to be done in this area. According to estimates of ELCINA, the electronic components manufacturing sector suffers from a disability of around 10 per cent due to the lack of adequate infrastructure, domestic supply chain and logistics constraints, high cost of finance, inadequate availability of quality power, limited design capabilities and focus on R&D by the industry apart from inadequacies in skill development. "We are looking at building a large electronics manufacturing ecosystem in India and it's certainly never late to start. Hence, FAB can be a steppingstone to make India the global electronics manufacturing hub of the world. It will also be in line for achieving the NPE 2019 target of $400 billion of domestic manufacturing and export of electronics," said Pankaj Mohindroo, Chairman, ICEA.

Out of this, "a production of one billion mobile handsets is targeted by 2025, valued at $190 billion, including 600 million mobile handsets valued at $110 billion for export. Therefore, India has the opportunity and the capability to establish a full-fledged FAB electronics manufacturing ecosystem in the country," Mohindroo said in a statement. In April 2020, the government announced a Rs 41,000-crore Production Linked Incentive (PLI) scheme for manufacture of electronics in India. More recently, the scheme was extended to IT hardware with an outlay of Rs 7,350 crore. In order to incentivise the electronics sector further, the government had come out with an Expression of Interest (EOI) for setting up of semiconductor wafer or device fabrication facilities in India or acquisition of semiconductor FABs outside India.