Value addition in electronics needs to double: Meity Secy

Chennai: The value addition in electronics manufacturing in the country needs to double from 18%-20% at present to 40% and component making should be shifted from China, said S Krishnan, secretary of ministry of electronics and information technology (MeitY) on Saturday.
India brought the electronics assembly and now it is essential to shift supply-chains from China to move up the value and gain global market share, he asserted.But cautioned the country should take up value addition only where it is possible. He stressed the need for capacity building, training human resources and participation of large industrial groups into the sector.
Speaking on ‘Building Economic Resilience Through Technology’ at the G Ramachandran Endowment Lecture here in the city, Krishnan said southern states like Tamil Nadu and Karnataka should move out of labour-intensive electronics manufacturing services (EMS) like assembly and packaging, and focus more on higher-value component manufacturing.
Electronics assembly requires a lot of human resources which companies are increasingly finding it difficult to get in these southern states and these activities should be moved to states where labour is more easily available. “States such as TN should become a centre for component manufacturing just like the automobile sector,” he said.
Tamil Nadu exported $9.56 billion worth of electronics in the FY2023-24, garnering 33% of the national share. Karnataka, is the distant second with a 16% share.
“You (Tamil Nadu) are the largest exporter of electronics, it’s only because of Apple iPhones, which are exported from Tamil Nadu. But, equally when you look at the other part of the story, it’s primarily an assembling exercise. So what happens is you need a large number of people working in those factory shop floors. We do not have a lot of people prepared to work in that. Companies actually find it difficult to mobilize (people) within the state,” he explained.
Krishnan said that shifting the electronics supply chain is crucial for building a resilient supply chain, safeguarding the economy from geo-political risks and strategic requirements, referring to potential conflict in Taiwan strait.