The last 9-10 years have seen tremendous growth across four major consumer electronics segments — mobile phones, consumer electronics, IT hardware and electronic components — that account for over 70 per cent of India’s domestic manufacturing profile. The pace is such that tech giants are now lining up investments worth billions of dollars in the country. The country is rapidly becoming an electronics manufacturing hub, with the sector expected to rise to $300 billion by 2025-26. From Apple to Foxconn and US-based Micron Technologies to domestic major Tata Group, the companies are aiming to leverage domestic capabilities to achieve supply chain diversification and scale up production by manufacturing in the country. Taiwanese contract manufacturer Foxconn has received approval to invest at least $1 billion more in a plant in India that will manufacture Apple products. The fresh investment is on top of the $1.6 billion it earlier set aside for the 300-acre site close to the Bengaluru airport. Meanwhile, the Tata Group is planning to build one of India’s largest iPhone assembly plants in Tamil Nadu’s Hosur. According to media reports, the facility is expected to feature around 20 assembly lines and employ 50,000 workers within two years. The site is expected to be operational within 12 to 18 months. With Taiwanese electronics manufacturer Wistron selling its India operations to the Tata Group for $125 million, Tata Electronics is going to become the first Indian company to manufacture new Apple iPhones in the country, which is a major fillip to the government’s ‘Make in India’ initiative. According to reports, Apple plans to expand its investment in the country to approximately $40 billion over the next four to five years. Apple has already crossed the $7 billion production milestone during the previous fiscal year. Apple is aiming to manufacture more than 50 million iPhones in India per year, as it aims to shift some of the production out from China. The tech giant aims to achieve the target within the next two to three years, with additional tens of millions of units planned after that, according to the Wall Street Journal. According to government and industry data, India saw mobile phones exports worth $5.5 billion (over Rs 45,000 crore) in the April-August period in the ongoing fiscal year (FY24). As per estimates by the Department of Commerce and the India Cellular and Electronics Association (ICEA), accessed by IANS, the April-August period saw mobile phone exports worth $5.5 billion, against $3 billion (about Rs 25,000 crore) in the same period in FY22-23. India is set to cross Rs 1,20,000 crore in mobile phone exports in the current fiscal year. The country is now the second-biggest manufacturing hub for mobile phones due to heavy investment from original equipment manufacturers, original design manufacturers and companies dealing in components and parts. India is expected to export about 22 per cent of its total assembled mobile phones in 2023, according to Counterpoint Research. However, “China’s manufacturing and supply chain will still maintain its essential role in the longer run,” says senior research analyst Ivan Lam. According to Prabhu Ram, Head–Industry Intelligence Group (IIG), CMR, India’s domestic consumer electronics manufacturing sector has soared, propelled by a mix of strong tailwinds. “A conducive policy environment is attracting strong investments, while a burgeoning R&D pool in areas like chip design and AI is fostering innovation. Domestic champions are leading the charge, prioritizing IP-driven value creation and localisation,” Ram told IANS. India’s electronics sector is set to harness $7 billion untapped revenue by 2035 via circular business model and policy pathways, say industry stakeholders. Current commitments and targets set the projected market size for these circular models at $13 billion in 2035. Yet, the total addressable market, achievable through the right public and private actions, can reach an astounding $20 billion, revealing an untapped potential of 35 per cent, according to the ICEA. Three core business models — Repair, Resell, and Recycling — are already thriving in India, predominantly driven by the informal sector. Around 90 per cent of collection and 70 per cent of recycling are handled by this competitive sector. However, only 22 per cent of the collected e-waste is managed by the formal sector, revealing room for improvement. Pankaj Mohindroo, Chairman, ICEA, highlighted the future potential of India’s electronics sector as a global manufacturing hub. “I am confident that the electronics industry would facilitate sustainable circular economy practices to ensure a sustainable green future for the generations to come,” Mohindroo said. Meanwhile, the ICEA is also setting up a task-force to ensure that the current electronics trade between India and the US goes up from an estimated $8 billion to $100 billion in a decade. “We are setting up a task-force to ensure that the current electronics trade between the two countries goes up from an estimated $8 billion to $100 billion in a decade. The role of lead firms of global value chains (GVCs) will be crucial but, at the same time, new jobs and opportunities for Indian businesses and startups will be created,” Mohindroo informed. In September, US-based Micron Technology started the construction of a Rs 22,500 crore facility in Sanand, Gujarat, that will set a benchmark for India’s semiconductor journey. “This plant sets a major milestone for Prime Minister Narendra Modi’s vision of making India a semiconductor hub — the way the country has achieved in sectors like mobile, electronics, defense, railways, aviation and multiple other areas where progress is visible,” Union IT MInister Ashwini Vaishnaw had told IANS. The engineering major Larsen & Toubro (L&T) has also announced to invest up to Rs 830 crore to build a fabless semiconductor chip design subsidiary which will ramp up the country’s plan to become a semiconductor hub. In just 15-16 months’ time, India has seen the construction of its first-ever semiconductor plant in Gujarat, received more manufacturing proposals along with several chip-designing startups now operational in the country. “This momentum is expected to continue in 2024, with India poised to become a major hub for consumer electronics manufacturing and a formidable export powerhouse,” said Ram.

Whether it is about building a road for connectivity or restoring an individual’s dignity through toilets, Prime Minister Narendra Modi’s government has pursued a diverse blend of welfare and GDP spending.

Each government initiative focuses on building sustainable assets that not only result in extensive connectivity, robust infrastructure, rural and urban renewal but also generate jobs and aid human capital development. These programmes constitute the foundation for the 21st-century India, moulding the vision of a New India, rapidly progressing towards the realization of the goal of becoming a ‘Viksit Bharat’ (Developed India).

All of this transcends the concept of transactional welfarism. It is about creating a virtuous cycle of economic demand via empowerment of individuals cutting across lines of caste, class, community, religion and gender, according to a blog on Modi’s website which explains his economic policy.

It is about establishing conditions for growth that are both sustainable and egalitarian. embodying the principle of ‘Sabka Saath, Sabka Vikas, Sabka Vishwas aur Sabka Prayas’ as stated by the Prime Minister.

PM Modi’s inclusive developmental paradigm stands vindicated today. Along with the growth in our GDP, the government has been able to lift 13.5 crore people out of poverty — an unprecedented achievement. Globally, the model has ensured that India maintains its developmental streak even as countries like China show vulnerability, the blog said.

PM Modi’s GDP plus Welfare Model is a formidable recipe for a formidable India — an India which is Atmanirbhar and Viksit.

Exceeding all expectations and predictions, India’s Gross Domestic Product (GDP) has demonstrated a remarkable annual growth of 7.6% in the second quarter of FY2024. Building on a strong first-quarter growth of 7.8%, the second quarter has outperformed projections with a growth rate of 7.6%.

A significant contributor to this growth has been the government’s capital expenditure, reaching Rs. 4.91 trillion (or $58.98 billion) in the first half of the fiscal year, surpassing the previous year’s figure of Rs 3.43 trillion. India has emerged as an outstanding performer among major economies, showcasing resilience in the face of a globally uncertain environment characterized by risks related to geopolitical conflicts, fluctuating energy prices, and concerns about a potential recession.

This impressive milestone further substantiates the country’s unique development paradigm. A paradigm, that has been a hallmark of Prime Minister Narendra Modi’s government in the last 9 years, set to leave an inspiring trail for other developing nations to follow, it said.

The GDP, in itself, has been an incomplete measure of development as it overlooks inequality amid growth.

However, once PM Modi took office in 2014, growth intertwined with welfare to revolutionize the Indian economic experience. The fruits of the shift are visible today as India continues to be the fastest growing major economy even as the global headwinds don’t show much promise, it said.

PM Modi’s GDP Plus Welfare model has worked wonders for a country that had been long deprived of even the basic amenities of life. This success can be attributed to a departure from the previous governments’ approach to welfare, which primarily involved handouts, loan write-offs, or the distribution of consumer goods.

Taking a leaf out of his development initiatives in Gujarat, PM Modi focused on building fundamental public infrastructure first, empowering individuals to act as agents of change, the blog said.

“We have seen this approach in government schemes like SAUBHAGYA, Jal Jeevan Mission, PM Awas Yojana, and PM Gram Sadak Yojana, among others. Today we have achieved 100% electrification of villages while over 13.7 crore tap water connections make water available to 70% of our families from only 17% about a decade ago.

“In addition, PM Modi’s government has sanctioned over 4 crore houses towards its guarantee of Housing for All. The Swachh Bharat Mission has successfully constructed over 11.7 crore toilets, contributing to improved sanitation nationwide. In 2014, barely half of the villages had all-weather road connectivity, but today, the number has surged to over 99%,” the blog said.

Going beyond the fundamental needs, the government since 2014 has taken transformative measures to augment economic activity in every possible way. In manufacturing, for example, initiatives like Make in India, Production-Linked Incentive schemes, along with labour reforms have greatly energized overall industrial sentiment.

Today, as the data suggests, manufacturing has achieved a real GVA growth of 13.9% in Q2 of FY2024 against 4.7% in Q1. PMI Manufacturing continues to expand, reaching 55.5 in October 2023.

The services sector has also performed well registering a jump of 5.8%, driven by robust financial, public administration and professional services. The construction sector, in particular, is performing exceptionally well, jumping from 7.9% in Q1 to 13.3% in Q2 as the government increased its capex by over 40%.

In addition, schemes like PM Fasal Bima Yojana, PM KISAN, Paramparagat Krishi Vikas Yojana, PM Krishi Sinchayee Yojana, and e-NAM are actively supporting, modernizing and changing the face of Indian agriculture, the blog said. PM Modi has been heavily committed to charting the trajectory for Bharat to become a developed country by 2047.

His further push towards building long-term infrastructure finds momentum via AMRUT, Smart Cities, Vande Bharat trains, industrial and freight corridors along with Sagarmala and Bharatmala.

These bona fide interventions are powered by PM Gati Shakti and National Infrastructure Pipeline that aim to simplify and integrate planning, and funding of infrastructural activity in the country respectively, the blog said.

In a report on India’s transformation in less than a decade, foreign brokerage Morgan Stanley noted, “This India is different from what it was in 2013. In a short span of 10 years, India has gained positions in the world order with significant positive consequences for the macro and market outlook”.

Morgan Stanley listed the 10 big changes including supply-side policy reforms, formalisation of the economy, Real Estate (Regulation and Development) Act, digitalizing social transfers, Insolvency and Bankruptcy Code, flexible inflation targeting, focus on FDI, India’s 401(k) moment, government support for corporate profits and MNC sentiment at a multiyear high.

As India’s per capita income increases from US$2,200 currently to about US$5,200 by F2032, this will have major implications for change in the consumption basket, with an impetus to discretionary consumption, Morgan Stanley said.

The share of profits in GDP has doubled from all-time lows hit in 2020 and are set to rise further – maybe even double from here – leading to strong absolute and relative earnings.

This explains India’s apparently rich headline equity valuations. Triggered by supply-side reforms by the government, we expect a major rise in investments, a moderation in the CAD and an increase in credit to GDP to support the coming profit growth, it added.