FDI Inflows to Electronics

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FDI Inflows to Electronics industry has been permitted up to 100 percent under automatic route except Aerospace and defense equipment manufacturing. The size of electronics industry in India is estimated to be USD 11 billion. Moreover, there are various factors that are conductive to FDI Inflows to Electronics in India.

An Overview of the Electronics Industry in India-

The electronics industry in India is estimated to be worth USD 11 billion. India has a share of 0.6 percent in the international market in terms of electronics hardware.

The electronics industry in India designs and manufactures a wide range of electronics hardware namely, consumer electronics, industrial electronics, computers, telecom equipment, and electronic components. Capacitors, resistors, wound components, CD-ROMs, color picture tubes, and the like are highly export-oriented products manufactured by the electronics industry in India. Some leading international players of electronics industry which have set up manufacturing units in India are Siemens, Texas Instruments, Matsushita, Alcatel, LG, Samsung, Sharp and Lenovo. Some of the international players have also established R&D centers in India.

Reasons for FDI Inflows to Electronics

Important factors which are conductive to FDI Inflows to Electronics

  • Availability of low-cost, efficient, and technically skilled workforce.

  • Opportunities for the manufacturing of consumer electronic goods and mobile handsets are high given the growing demand in the domestic electronics market.

  • Electronics hardware is growing leaps and bounds globally.

  • Large-scale manufacturing units of electronics hardware will be set up in the special economic zones with a total exemption of duties and taxes.

  • India has high chances to acquire a size USD 11 billion in terms of contract manufacturing out of USD 500 billion by 2010.
  • Designing of electronics will touch USD 7 billion by 2010.

  • Component exports will touch USD 5 billion by 2010.

  • Nokia and Elcoteq Network are planning to set up manufacturing operations in India.

FDI Inflows to Electronics-

  • 100 percent Foreign Direct Investment (FDI) is permitted in the electronics industry under automatic route except Aerospace and defense equipment manufacturing.

  • The National Electronics Hardware Manufacturing Policy has been advised to be implemented with the aim to dissolve tariff and duties as well as set up manufacturing units which will encourage more of foreign investments in the unit.

  • Electronic Hardware Technology Parks are on their way to be set up in order to attract more investments.

Last Updated on 4/23/2011