Face-off aside, imports from China remain high

Despite promoting domestic production in a big way after the standoff with China, India still imports a large quantity of electronic goods and smart phone components from the communist country.

Of the total imports, 37% of electronics components and 45% of smart phone components were imported from China in the last financial year, Union Minister of State for Electronics and Information Technology Sanjay Dhotre informed Rajya Sabha.

Replying to BJP member K C Ramamurthy, he said that according to data available from the Directorate General of Commercial Intelligence and Statistics (DGCI&S), of the total Rs 1,15,558 crore electronic component imports in 2019-20, the imports from China were worth Rs 42,983 crore, amounting to about 37%. Of the total Rs 56,039 crore worth smart phone components imported in 2019-20, Rs 25,441 crore worth goods were imported from China, which amounts to about 45%.

The shutdown of factories for about two months has impacted the domestic electronics manufacturing sector. According to the India Electronics & Semiconductor Association (IESA), there will be production loss of 20%-25% in 2020-21, compared to the output in 2019-20, the minister said.

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“Steps are being taken to broad-base the sources of electronic components/raw material imports in India while promoting domestic electronics production at the same time, in order to reduce dependency on a single market/geographical region, so that any sudden, abrupt or unforeseen event such as the Covid-19 outbreak in China does not cause large-scale shortage of inventory in the domestic market,” he said.

To promote domestic electronics manufacturing, the Ministry of Electronics and Information Technology (MeitY) has launched three new schemes, viz, Production Linked Incentive Scheme (PLI) for Large Scale Electronics Manufacturing, Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) and Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme, on April 1, 2020, to attract and incentivise large investments in the electronics value chain and promote domestic value addition and exports.

“Alternative supply lines are also being explored in coordination with Indian embassies, industry associations and domestic industry. Electronics industry is also being encouraged to take advantage of the new schemes to strengthen the domestic electronics sector,” the minister said.