ELCINA seeks ₹72,500 Cr package to reduce import dependence

The Electronics Industries Association of India (ELCINA) has sought a ₹72,500 crore (US$ 8.57 billion) package to boost local electronics raw material production and reduce import reliance, addressing a projected USD 248 billion (₹21 lakh crore) input deficit by 2030.

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The Electronics Industries Association of India (ELCINA) has urged the government for a ₹72,500 crore (US$ 8.57 billion) support package to enhance local production of raw materials for the electronics sector, aiming to reduce dependency on imports. This demand comes as the demand-supply deficit for inputs in the electronics industry is projected to reach US$ 248 billion (₹21 lakh crore) by 2030, driven by a target of US$ 500 billion in electronics production.

The proposed support package is expected to address this deficit by reducing it by US$ 146 billion (₹12.36 lakh crore), bringing it down to US$ 102 billion (₹8.63 lakh crore). Rajoo Goel, Secretary General of ELCINA, highlighted the challenges faced by component manufacturers, stating that unlike finished products, where output can reach 16 times the investment, electronic components manufacturing yields a maximum output of three times the invested capital.

“Investors are hesitant due to low returns, high operational costs, and lengthy gestation periods. To address this, we have requested US$ 8.57 billion, including US$ 2.14 billion for capital expenditure to encourage industry expansion and US$ 6.43 billion as production-linked incentives (PLI),” Goel explained.

ELCINA’s proposal focuses on non-semiconductor components, which constitute 40% of the total value of a finished product. Key components include printed circuit boards, miniature electronic parts, discrete semiconductors, and metallic components. These elements account for a significant share of the 60% cost of inputs in electronics manufacturing.

The government has already implemented the India Semiconductor Program, approving investments worth ₹1.52 lakh crore. However, ELCINA emphasizes the need for parallel support for non-semiconductor components, which are labor-intensive and capable of generating 50 lakh jobs by 2030.

Goel projected that government intervention could stimulate an additional US$ 36 billion in investments by 2030. Without support, production of non-semiconductor components is expected to grow from US$ 13 billion in 2022 to US$ 37 billion by 2030, leaving a massive deficit of US$ 248 billion in the segment.

Elcina’s proposed measures could transform India into a global electronics manufacturing hub by fostering domestic production and reducing reliance on imports, crucial for meeting the sector’s ambitious growth targets.