Electronics component makers seek Rs 72,500 crore worth financial sops

NEW DELHI: Electronics component makers body Elcina has sought a Rs 72,500 crore (USD 8.57 billion) support package to boost local production of raw materials and cut reliance on imports, an industry official said.

Electronic Industries Association of India (Elcina), the country's oldest industry body of the Indian electronics sector, estimates that the demand-supply deficit for inputs in the electronics segment will increase to USD 248 billion (about Rs 21 lakh crore) by 2030 to cater to projected USD 500 billion electronics production and it would be met largely by imports.

The industry body expects that the government's support for non-semiconductor components can help reduce the deficit in the country by USD 146 billion (Rs 12.36 lakh crore) to USD 102 billion (Rs 8.63 lakh crore).

Elcina Secretary General Rajoo Goel told PTI that unlike finished products where the factory output can go up to 16 times the investment, an electronic components factory can at the most generate an output of three times the invested capital.

"People hesitate to expand their investment in electronic components due to low return, high operational cost and long gestation period. Therefore we have requested the government for USD 8.57 billion comprsing USD 2.14 billion for capex to encourage expansion of the industry and USD 6.43 billion as PLI," Goel said.

The government is actively considering a comprehensive package to support the production of non-semiconductor electronic components.

Elcina has included miniature electronic components, printed circuit boards, some discreet semiconductors and active components, metallic components etc in the estimates.

According to the industry body, the components for which support is required account for 60 per cent of the total cost of a finished product.

Goel said that out of 60 per cent, non-semiconductor components account for 40 per cent of the total product value and 20 per cent are semiconductors.

The government has already put in place the India Semiconductor Program under which it has approved investments worth Rs 1.52 lakh crore to date.

Goel said that support for non-semiconductor components will create 50 lakh additional jobs by 2030 as the industry is labour-intensive.

"We expect that the support to non-semiconductor components segment will be able to attract additional investment of USD 36 billion by 2030," he said.

According to Elcina, non-semiconductor components production in India was around USD 13 billion in 2022 which is projected to reach around USD 20.7 billion by 2026 and around USD 37 billion by 2030 if the business continues as usual thereby leading to a deficit of USD 248 billion in the segment in the next six years.