Centre aims at 60-80% local value addition in IT hardware in 5-10 years

The Centre has begun discussions on the ways in which global electronics firms can boost the local value addition in products which are assembled in India to 60-80 per cent in the next five-ten years, according to a report in The Economic Times (ET).

ET quoted a source as saying that the Centre has asked industries operating in India to execute new production techniques, such as surface-mount technology (SMT) lines, to increase the local value-addition percentage.

An industry executive who attended a meeting with officials of the Ministry of Electronics and Information Technology was quoted as saying that ET that the government is asking the industry to go beyond the assembly of components and manufacture the printed circuit boards (PCBs) locally. Manufacturing motherboards locally will provide a big boost to local value addition.

Other industry executives were quoted as saying that the setting up of  IT hardware manufacturing facilities is still in the nascent stage. It could take more than 24 months for such facilities to develop fully.

An executive said that most laptop manufacturers right now get the components in strips which need to be soldered on the circuit board. The industry is now looking at setting up SMT lines in India.

ET quoted sources as saying that some firms, which have applied for the IT hardware  Production Linked Incentive (PLI) scheme, have already begun working on manufacturing components like PCBs. Firms have different levels of expertise in localising these components. They are making India-specific sockets, keycaps, and panel covers in the country.

According to the PLI scheme for electronics and hardware, applicant firms can get additional incentives based on the percentage of localisation that they implement.