Will India's 2024 Union Budget pave the way for tech manufacturing and semiconductor growth?

As India prepares for the 2024 Union Budget, industry leaders express optimism about the potential reforms and
India’s aspirations in semiconductors and tech manufacturing has industry leaders optimistic about potential reforms and investments that could boost the country’s tech manufacturing and semiconductor sectors.

With companies like Apple moving away from China and into India as part of their China Plus One policy, India is already shaping up to be a major player in the global manufacturing and supply chain scene. India, for all intents and purposes, is a force to be reckoned with

They foresee significant advancements in consumer electronics, infrastructure development, and workforce skill enhancement, aligning with Prime Minister Modi’s vision of establishing India as a global manufacturing leader.

Boosting Consumer Electronics Manufacturing
Rajeev Singh, MD of BenQ India and South Asia, is hopeful that the 2024 Union Budget will significantly boost India’s consumer electronics manufacturing sector. “We anticipate key measures such as further reductions in customs duties for components like LED panels, which would enhance domestic production of projectors and similar devices. Moreover, simplifying the GST structure to just three tiers could significantly enhance business operations and make India more appealing for consumer electronics manufacturing.”

Singh also emphasizes the importance of policies supporting digital education initiatives and potential tax cuts to increase disposable income, which could drive demand for products. “These measures, coupled with existing production-linked incentives, could help companies like BenQ quickly expand local manufacturing and position India as a regional export hub. We’re optimistic that the forthcoming reforms will propel the consumer electronics industry forward, aligning with Prime Minister Modi’s vision of establishing India as a global manufacturing leader.”

Strengthening the Semiconductor Industry
Eswara Rao Nandam, CEO and Founder of Polymatech Electronics, discusses the government’s commitment to establishing India as a leading semiconductor hub. “The Government of India has demonstrably committed to establishing the nation as a leading semiconductor hub. However, to ensure the long-term success and global competitiveness of this domestic industry, a multifaceted approach is necessary. Strategic investments in infrastructure development are paramount, with a particular focus on uninterrupted electricity supply, readily available water resources, efficient transportation networks, and a skilled workforce.”

Nandam highlights the need for consistent access to electricity and a steady supply of essential gases for semiconductor chip manufacturing. “Semiconductor chip manufacturing necessitates a steady supply of various gases such as argon, nitrogen, and helium. A well-developed and efficient transportation network is crucial for the smooth operation of the semiconductor industry. By prioritizing and strategically building this critical infrastructure, the government can mitigate potential risks and make the entire sector more resilient.”

Enhancing Technological Infrastructure
Arun Balasubramanian, VP & MD, India & South Asia at UiPath, underscores the importance of bolstering India’s technological infrastructure. “With the government proposing a substantial 71% increase in the outlay for chip and electronics manufacturing in the interim budget announcement, we anticipate this budget will continue to bolster India’s technological infrastructure, enhancing our global competitiveness in high-tech manufacturing sectors.”

Balasubramanian sees these investments as crucial for maintaining India’s competitive edge in the global market. “As the Indian economy has been growing faster than other regions, this budget will be instrumental in ensuring the country continues its economic growth trajectory by focusing on key areas like education and employment.”

Fostering Innovation and Skill Development
Imran Kagalwala, Co-Founder at UNIX India, looks forward to strategic initiatives aimed at fostering innovation and enhancing R&D capabilities in consumer electronics. “In the upcoming Union Budget, consumer electronics manufacturers in India are looking forward to strategic initiatives aimed at fostering innovation and enhancing research & development (R&D) capabilities. While the government has made significant strides in supporting Indian manufacturers through initiatives like the ‘Made in India’ campaign and the PLI scheme, there is a pressing need to level the competitive playing field.”

Kagalwala anticipates measures such as antidumping duties to ensure fair competition against international companies and the localization of components to reduce dependency on imports. “Policy reforms and investments in skill development are expected to prepare the workforce for future challenges and opportunities in the global market. Additionally, there is eager anticipation for measures aimed at promoting exports, which could elevate India’s stature as a significant player in the international consumer electronics sector.”

Embracing AI and Automation
Ranga Jagannath, Senior Director at Agora, emphasizes the importance of upskilling and reskilling workers for an AI-driven future. “AI and automation are reshaping industries, sparking important conversations about the future of work. To embrace this transformation positively, we must prioritize equipping workers with the skills essential for an AI-driven world. Upskilling and reskilling are pivotal not only for job security but also for empowering individuals to thrive in roles that demand human creativity and problem-solving abilities.”

Jagannath calls for significant investments in education and training programs from both governments and businesses. “This investment in human capital not only prepares us for the evolving job market but also creates opportunities for personal and professional growth. AI can augment human capabilities, and with the right skills, employees can harness AI to enhance productivity and innovation in their roles.”

The 2024 Union Budget is expected to bring significant advancements for India’s tech manufacturing and semiconductor industries. By focusing on strategic investments, infrastructure development, and skill enhancement, India is poised to strengthen its position as a global leader in these sectors, driving economic growth and innovation for years to come.