India has potential to export motherboards, technically called printed circuit board assembly(PCBA), worth up to Rs 8 lakh crore between 2021-26, mobile devices industry body ICEA and EY said in a joint report.
However, in the absence of government incentives and subsidies the export potential will be around Rs 29,500 crore during the five year period, the report said.
India Cellular & Electronics Association (ICEA) Chairman Pankaj Mohindroo said the government is required to realise the cumulative export potential of Rs 8 lakh crore by 2026.
"If support of 4-6 percent on exports of PCBAs can be provided, by 2025-26, the cumulative PCBA export for India can be about $109 billion (over Rs 8 lakh crore). However, if no support is offered, the export is estimated to dwindle to $4 billion (around Rs 29,500 crore)," the report said.
PCBA forms the base of electronic products. Mohindroo said the current size of PCBA industry in India is around Rs 2 lakh crore and it is expected to reach Rs 6.4 lakh crore during 2021-26.
The National Policy on Electronics 2019 (NPE) envisages electronic manufacturing turnover of $400 billion (Rs 26 lakh crore at the time policy was approved) by 2025, out of which $190 billion (Rs 13 lakh crore) is expected to come from the mobile phone segment.
According to ICEA, IT hardware — laptop and tablet manufacturing — has potential to contribute over Rs 7 lakh crore to the NPE target and PCBA can add another about Rs 8 lakh crore.
"We have requested for separate production linked incentives for PCBA. The consumption of PCBA in India will be majorly driven by mobile devices," Mohindroo said. He said there are a lot of cost disabilities which India has to address to compete with other Asian countries like China, Vietnam etc.
"Standalone PCBA exports from India face cost disabilities against well-established manufacturing hubs, with large manufacturing capacities, such as China and Vietnam. In addition, 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," the report said.
India's exports of standalone PCBAs for mobile phones were $0.15 billion (Rs 1,100 crore) in 2019-20 and are expected to be $0.30 billion (Rs 2,200 crore) in 2020-21.
"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.
(Edited by : Jomy)