Latest news with #SemiconductorMission
Mint
4 days ago
- Business
- Mint
Think ahead: India's electronics manufacturing must go up the value curve
India's smartphone exports stood at $10.96 billion in 2022-23 and surged to $24.14 billion in 2024-25, a striking compound annual growth rate (CAGR) of 48.4%. Long reliant on imports and peripheral to global value chains, India's electronics manufacturing is becoming a pillar for job creation, export growth and technological advancement. However, India must temper its excitement about labour-led electronics manufacturing growth and double down on boosting domestic value addition. The 'China plus one' strategy, accelerated by the pandemic and heightened US–China tensions, has led to supply chain diversification by global manufacturers. Among alternatives, India stands out thanks to its vast domestic market, improving infrastructure and large labour supply. India is the world's second-largest mobile phone making hub now, a status that reflects both expanding production and rising quality standards. It is also well placed to further capitalize on the 'friend-shoring' trend born of geopolitics. Also read: Centre mulls maximising electronics earnings amid uncertainty over Apple exports, tariff haze At the heart of our manufacturing drive is the government's production-linked incentive (PLI) scheme, which has attracted significant investments from global players. Apple, for instance, now assembles 10-12% of all iPhones in India. In 2024-25, iPhone exports amounted to $17.4 billion. Samsung runs the world's largest mobile phone factory in Noida, catering to both domestic and international markets. Beyond mobile phones, India's Semiconductor Mission, backed by a $10 billion outlay, aims to build a full-stack chip ecosystem, from fabrication units to assembly, testing, marking and packaging facilities, apart from design capabilities. This is critical given that semiconductors are India's second-largest import item after crude oil. Complementing these efforts is the Electronics Manufacturing Clusters scheme, which provides plug-and-play infrastructure, land and logistical support to manufacturers. India is also gaining momentum in display manufacturing, printed circuit board production, camera modules and power electronics. We must also seize the global data centre boom—not just as a digital infrastructure opportunity, but as a strategic lever for manufacturing. Surging worldwide demand for hyperscale data centres and AI infrastructure is rapidly enlarging markets for servers, cooling systems, power equipment and networking components—areas in which India can become globally competitive. By aligning industrial policy, export incentives and skilling programmes with the needs of global data centre operators, India can attract investment and position itself as a hardware manufacturing hub for digital infrastructure. A dual strategy of hosting global data and building the infrastructure that powers it could amplify India's economic prospects and influence. Electronics manufacturing is labour-intensive and could, over the next five years, generate over 1 million direct jobs, particularly in Tier 2 and Tier 3 cities. As domestic value chains deepen, micro, small and medium enterprises (MSMEs) could be integrated into global production networks. This would not only spread the benefits of industrial growth, but also help formalize and upgrade India's vast informal manufacturing base. Also read: Why India's electronics sector is least at risk from Trump's reciprocal tariff scrutiny Increasing value addition is the other challenge. In smartphone manufacturing, it has improved from 2% in 2014 to 15-16% in 2024, but still trails China's. Premium smartphones exported from India rely on 90-95% imported components. According to the Global Trade Research Institute, for every $1,000 worth of iPhones that India exports, we capture just $30—compared to $450 by the US and $150 by Taiwan. India ranks 44th on Harvard University's Economic Complexity Index, a measure of production sophistication, while China is 16th and Taiwan is 4th. Vietnam, ranked 48th, saw a tenfold surge in its manufacturing exports from 2000 to 2023. Yet, its domestic value addition has plateaued since 2010, offering us a cautionary example. Unlike China and Vietnam, India has not reached the 'Lewis Turning Point' at which developing economies exhaust their labour surpluses and wages begin to rise swiftly. This reflects structural challenges in our labour market. Until India reaches that point, it is easy to be misled by the apparent advantage of labour availability, without recognizing the pressing need to focus on value addition. For enduring economic growth, India must move up the production value chain and not remain merely a destination for low-value product assembly. We must invest in precision tooling, high-end materials and critical components manufacturing. Programmes like the Electronics Components Manufacturing Scheme are important steps, but both their scale and execution speed must increase significantly. We must also sharpen our focus on skilling and sustainability. Deeper investments in technical education and industry-academia collaboration are vital. While we must adopt globally recognized sustainability practices, our policies on issues like e-waste responsibility must be business-enabling and grounded in operational realities. Also read: Budget smartphones sell like hot cakes in tepid market India's electronics manufacturing journey is no longer an experiment—it is now a strategic economic growth pivot. If this momentum continues, the sector could contribute over $300 billion in annual output by 2030, create millions of jobs, boost exports and significantly strengthen India's technological and economic sovereignty. The author is a strategy and public policy professional. His X handle is @prasannakarthik
New Indian Express
25-05-2025
- Business
- New Indian Express
CM Revanth urges PM Modi's backing for Telangana's chip, defence, metro projects
HYDERABAD: Chief Minister A Revanth Reddy on Saturday urged Prime Minister Narendra Modi to support Telangana's efforts in becoming a major player in India's semiconductor ecosystem. Calling on Modi in Delhi, Revanth stated that Telangana is aligned with India's Semiconductor Mission and aims to emerge as a hub for advanced semiconductor and electronics manufacturing. Stating that Hyderabad already hosts a strong ecosystem, with global R&D centres such as AMD, Qualcomm and NVIDIA and major manufacturers like Foxconn and Kaynes, Revanth highlighted Telangana as an attractive investment destination by pointing out the state's offerings including seismic safety, industrial land availability, skilled workforce and supportive infrastructure. He requested Modi's intervention to secure ISM project approval for Telangana, stating that this would boost investor confidence and contribute towards India's target of $500 billion electronics production by 2030. He said ISM approval would help generate high-value jobs and strengthen India's global position in semiconductor supply chains. 'Hyderabad best for a defence hub' Revanth also sought central support for defence-related initiatives, including Defence PSUs, private sector JVs and capacity-building for MSMEs. He described Hyderabad as the largest 'Make in India' hub for aerospace and defence, supported by DRDO labs and over a dozen Defence PSUs. The chief minister said about 1,000 MSMEs in the city supply components to national and international OEMs, attracting companies such as Lockheed Martin, Boeing, GE, Safran and Honeywell. He called for fast-track approvals for defence JVs and offsets and said that OEMs have shown interest in Telangana but need assured Government of India orders. The chief minister pointed out that defence MSMEs face high capital investment and long gestation periods, thus requiring PLI support and incentives. Revanth urged official recognition of the Hyderabad-Bengaluru corridor as a defence corridor to ensure parity with other regions. He also proposed Hyderabad as the venue for the next Defence Expo.
Time of India
24-05-2025
- Business
- Time of India
Revanth's wants PM to fast-track approvals for Metro, projects & investments
Hyderabad: In a one-on-one meeting with Prime Minister Narendra Modi in Delhi on Saturday, chief minister A Revanth Reddy urged him to approve a dedicated channel for Telangana to attract global investments and boost exports. He also requested the issuance of a notification for the Hyderabad-Bengaluru defence corridor, support for defence and aerospace projects, approval to include Telangana in India's Semiconductor Mission, and the Union Cabinet's approval and funding for Hyderabad Metro Rail expansion, the regional ring road, and the dry port greenfield corridor with dedicated railway lines. Revanth presented a list of key projects being undertaken in Telangana during his meeting with PM Narendra Modi, following the NITI Aayog meeting in the national capital. The CM requested the PM to expedite and give cabinet approval for the Hyderabad Metro rail phase-II project with five new corridors (76.4 km), estimated to cost 24,269 crore. Telangana govt submitted Phase-II proposals to the Union housing and urban affairs ministry (MoHUA) on Nov 4, 2024. Telangana govt has also replied to clarifications sought by the ministry. "Instruct MoHUA to expedite and give cabinet approval for the Hyderabad Metro phase-II project," the CM urged the PM. Revanth also requested Modi to give financial and cabinet approval to both the southern and northern corridors of the Regional Ring Road (RRR) project. He also urged for the Centre's green signal to lay a railway line around RRR and another dedicated rail line along the greenfield expressway from the dry port near Hyderabad to Rajahmundry seaport in AP. Stating that Telangana was fully aligned with India's Semiconductor Mission (ISM) and aims to be a premier hub for advanced semiconductor and electronics manufacturing, the CM sought the intervention of the PM to secure ISM project for Telangana. "This will strengthen investor confidence and align with India's goal of $500 billion electronics production by 2030," he added. While requesting support for the defence and aerospace projects, both PSUs and private sector JVs, Revanth sought fast-track approvals for defence JVs. The CM asked the PM for a dedicated approval channel to attract global investments and boost exports and urged him to ensure that a notification was issued for the Hyderabad-Bengaluru defence corridor for parity in support. Industries were encouraged towards UP, Tamil Nadu, Gujarat, and Andhra Pradesh, as against mature and rich ecosystems such as Hyderabad and Bengaluru, Revanth added.
The Hindu
24-05-2025
- Business
- The Hindu
CM Revanth Reddy meets PM Modi, seeks support for Telangana's strategic projects
Chief Minister A. Revanth Reddy met Prime Minister Narendra Modi and sought his intervention and support in expediting approvals and providing financial assistance for projects in metro rail expansion, road and rail infrastructure, semiconductor manufacturing and defence sector growth. He explained the necessity of expanding the Hyderabad Metro Rail, stating that Phase-I, covering 69 km across three corridors, was completed with an investment of ₹22,000 crore, and no expansion has occurred in the past decade. The Telangana government has now submitted detailed proposals for Phase-II, which envisions five new corridors totaling 76.4 km at an estimated cost of ₹24,269 crore. The project is designed as a joint venture between the Centre and the State, with the Government of India contributing 18% (₹4,230 crore), Telangana 30% (₹7,313 crore), and the remaining 48% (₹11,693 crore) being raised through debt. CM Reddy urged the Prime Minister to direct the Ministry of Housing and Urban Affairs (MoHUA) to expedite Cabinet approval, citing precedents such as the approval of Chennai and Bangalore Metro expansions. The CM also discussed the critical Regional Ring Road (RRR) project and requested financial and Cabinet approval for both the Northern and Southern sections simultaneously to avoid cost escalations. He also sought support for a Greenfield expressway and railway line connecting Hyderabad's proposed dry port to the Bandar port in Andhra Pradesh. Mr. Reddy requested Central support for the State's semiconductor manufacturing initiatives under India's Semiconductor Mission (ISM), which would not only attract massive investments but also help India achieve its $500 billion electronics production target by 2030. He said Hyderabad was now the largest 'Make in India' hub in the defence sector, housing major DRDO facilities and global companies like Lockheed Martin, Boeing, GE and Safran. He appealed for fast-track approvals for defence joint ventures. He sought official notification of a Hyderabad-Bangalore Defence Corridor. Later, the CM also met Union Minister Kumaraswamy.
CNBC
15-05-2025
- Business
- CNBC
India approves Apple-supplier Foxconn's $433 million joint venture in bid to boost chip industry
Foxconn, the world's largest contract electronics manufacturer, has received approval from the Indian government to build a semiconductor plant in a joint venture with HCL Group, drawing an investment of 37.06 billion rupees ($433 million). The plant, which will be built in India's northern state of Uttar Pradesh, will be operational by 2027, Ashwini Vaishnaw, India's information minister, said in a cabinet briefing on Wednesday. Vaishnaw said the facility will manufacture Foxconn's display driver chips, which are used in mobile phones, laptops, automobiles, PCs, and other consumer electronics. According to a presentation by the minister, the plant will be designed to produce up to 20,000 wafers and 36 million display driver chips per month. Wafers are thin, circular slices of semiconductor material, usually silicon, which form the base of chips. The deal comes as Apple suppliers including Foxconn are increasingly turning to India in a shift away from China, amid persistent trade tensions between Beijing and Washington. However, bringing chip production to the country has been a difficult and lengthy process. Taiwan's Foxconn, officially known as Hon Hai Technology Group, first began producing iPhones in India in 2019 and has ramped up capacity in recent years, especially after experiencing pandemic-related production delays in China in 2022. In 2023, the company pulled out of a joint venture with Indian metals-to-oil conglomerate Vedanta to set up a semiconductor and display production plant in the country as part of a $19.5 billion deal. Apple reportedly has been striving to shift most of its iPhone production to India as its manufacturing in China faces threats from U.S. President Donald Trump's tariffs on the country. India could account for about 15%-20% of total iPhone production by the end of 2025, according to Bernstein analysts. Evercore ISI estimates that 10% to 15% of iPhones are currently assembled in India. Though most of Apple's most important products, such as smartphones and computers, received exemptions from Trump's "reciprocal tariffs" last month, officials had warned that the exemptions could be temporary. The U.S. Commerce Department is conducting a national security investigation into imports of semiconductor technology and related downstream products, which could result in new tariffs. U.S. imports from China during Trump's current term face 30% additional tariffs, while the rate is 10% for most other countries including on India and Vietnam. Analysts have previously told CNBC, that Trump's tariff policy was expected to accelerate efforts by Apple to shift manufacturing to India. India has been wooing Foxconn as part of its "Semiconductor Mission" which aims to build a strong chips and display ecosystem in the country. The Foxconn joint venture will be the sixth semiconductor unit to be constructed under the plan.
