Friday, August 19, 2022

India’s Export Potential in Motherboards between 2021-26 Valued at ₹8 Lakh Crore: Report

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A joint report released by mobile devices industry body ICEA and EY claimed that India could export motherboards, which are technically called Printed Circuit Board Assembly (PCBA), worth up to ₹8 lakh crore between 2021-2026.

However, the report included that in the absence of government incentives and subsidies, the export potential will significantly decrease to around ₹29,500 crores during the five-year period. For the potential to be met, the government must provide support of 4-6 percent in exports of PCBAs.

Pankaj Mohindroo, Chairman of India Cellular & Electronics Association (ICEA), said that the cumulative export potential of ₹8 lakh crore by 2026 has to be recognized by the Indian government. Mohindroo said that currently, the size of the PCBA industry in India is approximately ₹2 lakh crore, and during the 2021-26 period, it is expected to reach ₹6.4 lakh crore.

The National Policy on Electronics (NPE) 2019 forecasts electronic manufacturing turnover of USD 400 billion (₹26 lakh crore at the foreign exchange rate when this policy was approved) by 2025. Out of the USD 400 billion, the mobile phone segment is expected to contribute USD 190 billion ( ₹13 lakh crore).

According to ICEA, PCBA can contribute ₹8 lakh crore to the NPE target, and an additional ₹7 lakh crore can be added by IT hardware, which includes laptop and tablet manufacturing. 

“We have requested for separate production linked incentives for PCBA. Mobile devices will majorly drive the consumption of PCBA in India,” Mohindroo said in the report.

“Standalone PCBA exports from India face cost disabilities against well-established manufacturing hubs, with large manufacturing capacities, such as China and Vietnam. Besides, China offers various incentives for R&D activities, tax benefits on exported goods, policies to promote an export culture, significant investments across the value chain, and technology transfer from global players,” he added.

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In 2019-20, India’s exports of standalone PCBAs for mobile phones were USD 0.15 billion ( ₹1,100 crores). By 2020-21 these are expected to be USD 0.30 billion ( ₹2,200 crores).

“For other electronic products, standalone PCBA exports are estimated to begin only from 2022-23 as manufacturing capacities increase in the country,” the report said.


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