The Confederation of Indian Industry (CII) has come up with a set of recommendations for the Indian Electronics and Semiconductor industry. CII made the recommendation in a new report, "Developing India as the Manufacturing Hub for Electronics Components and Sub-Assemblies."

• In its report, it has suggested that the government offer a 6-8 percent fiscal incentive to domestic manufacturers of electronic components and sub-assemblies. The incentive should be extended for six to eight years to give companies enough time to scale up and increase their value-added production.
• The report also identified five priority components/sub-assemblies that India should focus on developing: batteries (lithium-ion), camera modules, mechanicals (enclosures etc.), displays, and PCBs.

CII said that India's component industry faces a number of challenges, including high costs of materials, finance, and logistics. The government's incentive support has been helpful, but it has not been enough to make India a competitive manufacturing base for electronic components.

The report estimates that the demand for components and sub-assemblies will reach $240 billion by 2030, supporting $500 billion worth of electronics production. The priority components and sub-assemblies market is expected to grow to $139 billion by 2030.

India can hardly afford to sustain its current reliance on imports for these components. The CII report recommends that the government take a number of steps to boost the domestic manufacturing of electronic components, including providing fiscal incentives, improving infrastructure, and promoting research and development.

The Indian government should adopt several measures to promote domestic manufacturing of components and sub-assemblies, the report added. - The report recommends that the government introduce SPECS 2.0, a modified version of the Scheme for Promotion of Electronics Components and Semiconductors (SPECS) scheme, with a higher subsidy of 25-40%. The new policy should also be more flexible, with support offered to both brownfield and greenfield projects. - The report also calls for the government to reduce import tariffs on priority sub-assemblies and components, such as camera modules, display modules, and mechanicals. Tariffs should be lowered to 5% or lower to make Indian products more competitive. - In addition, the government should pursue free trade agreements (FTAs) with the European Union, the United Kingdom, the Gulf Cooperation Council (GCC) countries, and emerging economies in Africa. This would help to create export demand for Indian-made products, which would in turn boost domestic manufacturing of components and sub-assemblies. - Finally, the report recommends that the government review Press Note 3, which was issued in the aftermath of the COVID-19 pandemic. The note imposes restrictions on investments, components imports, technology transfer, and the movement of skilled manpower. CII believes that these restrictions are no longer necessary and should be lifted.

India currently imports the majority of its components from China. This dependence on Chinese imports poses a significant risk to the long-term sustainability of India's electronics manufacturing industry. The CII report recommends that the government take steps to promote domestic manufacturing of components and sub-assemblies in order to reduce India's reliance on China.