India has the potential to become a $100 billion global manufacturing and export hub for printed circuit board assembly (PCBA) by 2026 — a key to reducing dependency on China, which is currently the world’s largest exporter, the India Cellular & Electronics Association (ICEA) and EY said in a report.
A PCBA is at the core of every electronic device such as mobile phones, tablets, computers, routers, televisions, washing machines, refrigerators and air conditioners. All electronic devices derive their functionality and intelligence from the PCBA, which constitutes up to 50% of the cost of manufacturing.
“To develop India as an electronics manufacturing hub, it may be important to bring in as many manufacturing operations as possible and PCBA is a key manufacturing activity,” the report noted, adding that investing in PCBAs is not only critical for maintaining domestic manufacturing momentum but also fundamental to India’s focus on reducing its trade deficit and dependency on China.
Pankaj Mohindroo, Chairman, ICEA, said it is crucial to offset the disabilities vis-à-vis China and Vietnam and encourage industry players to set-up manufacturing facilities in India. Companies manufacturing in India suffer a disability due to inadequate availability of quality power, infrastructure and logistics; lack of domestic supply chain; high cost of finance and limited R&D, among others, he said.
“If support of 6% on exports of PCBAs can be provided, by 2025-26, the cumulative PCBA export for India can be about $109 billion. However, if no support is offered, the export is estimated to dwindle to a mere $4 billion,” ICEA and EY said.
The report also pitched for allowing import of used plant and machinery without any restrictions or conditions to ease the high capex burden as well as supply of uninterrupted and stable power. “As the PCBA manufacturing industry works on the principle of Just in Time (JIT), it requires unconstrained access to components and raw materials. Hence, prioritisation of import/export of the products and priority clearance at airports and ports would be required to ensure uninterrupted supply chains and efficiency of operations,” it said.