After making tremendous strides in smartphone manufacturing in the past few years, India now appears set to seize the opportunity to manufacture laptops and tablets.
The Union Cabinet in February approved a Rs 7,325-crore Production Linked Incentive (PLI) scheme for laptops, tablets, all-in-one-personal computers, and servers.
“In a post-virus era, amidst the ongoing realignment of global value chains, the PLI scheme for IT hardware will give a strong impetus to India’s manufacturing competitiveness,” Prabhu Ram, Head-Industry Intelligence Group (IIG), CMR, said.
“On the back of mobile manufacturing success story, the PLI for IT hardware is a game-changer that will lead to increasing domestic value addition and more importantly, position India as a major exports hub.”
A boost to laptop and tablet manufacturing is particularly significant as it can help reduce imports and dependence on China for these devices which have become all the more important as their usage skyrocketed amid Covid-19 restrictions.
The rise in online learning amid the pandemic particularly increased their usage and utility among students.
“The pandemic has made all of us realise how important digital is as a medium. We equally require devices to an interface, for example in education. That is where we have huge potential for laptops that intersects affordability and reliability,” said Faisal Kawoosa, Founder & Chief Analyst, techARC.
According to a report from the International Data Corporation (IDC), the year 2020 ended as the biggest year for notebooks with 7.9 million unit shipments during the year. Notebook shipments grew by 6 per cent in 2020.
Similarly, the India tablet market recorded 14.7 per cent year-over-year growth with shipments totalling 2.8 million units in 2020.
According to a recent joint report by industry body India Cellular & Electronics Association (ICEA) and global consultancy major EY, boosting export-oriented local manufacturing of laptops and tablets can open up $100 billion opportunities for India by 2026.
Currently, the global manufacturing hubs for laptops and tablets are limited to a handful of countries with China being the predominant supplier to the world with a 66 per cent market share in 2019, worth $100 billion.
“This presents a manufacturing opportunity for India to ramp up the export of ‘Made in India’ laptops and tablets. By making in India for the world and obtain a sizable share of the global market will give us a manufacturing value of $100 billion by 2025,” ICEA Chairman Pankaj Mohindroo had said.
“It will also create five lakh additional jobs and a cumulative inflow of foreign exchange to the tune of $75 billion; and investment of over $1 billion,” Mohindroo said.
In addition, the right policy interventions to boost laptops and tablets manufacturing in India would negate imports of targeted products from China leading to the reduced trade deficit and greater self-reliance, he said.
Companies such as Foxconn, Flextronics, Jabil and Wistron already have a presence in India.
Global brands such as Samsung, Apple, HP, Dell, Acer, Lenovo and ASUS are also expanding their presence in India, while domestic companies are also building capacities in the mobile manufacturing space.
Incentivising them and the Original Equipment Manufacturers (OEM) players to undertake to manufacture of this product category appears to be not just a logical step but a significant geopolitical opportunity for India to seize a sizable share of the global market said the ICEA-EY report.