Made in India: U.S. Companies Eager to Invest in India’s Electronics Sector

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India is eager to join the boon of electronics manufacturing pioneered by its eastern neighbors.

The Dollar Business reports that Indian leaders and business owners want to expand India’s electronics manufacturing industry, which is considered “almost negligible” compared to the output of India’s neighbors such as China. Nearly 90% of India’s electronics are met through imports. According to Dr. Ajay Kumar, the head of the Electronics and Hardware Manufacturing Division of India’s Department of Electronics and Information Technology, India’s dependence on foreign electronic imports is predicted to reach $300 billion in five years.

Catherine Novelli, the U.S. Under Secretary for Economic Growth, Energy, and the Environment, expressed confidence that American companies will choose to invest in the Indian electronics industry, though she did caution the nation to pay close attention to the world’s supply-and-demand needs as it moves forward.

Ravi Shankar Prasad, India’s Minister of Communications and Information Technology, assured Under Secretary Novelli that Indian electronics companies will embrace American investments and will even secure export incentives from the Indian government. Dr. Kumar added that the government plans on investing in electronics companies itself by as much as a 15 Р20% share. The remaining capital, he says, will be provided by foreign as well as domestic investors.

Though India is a leading force in the telecommunications and IT industries, it lags far behind competitors like China in its electronics manufacturing output. According to the Indian Electronics and Semiconductors Association, electronics manufacturing only made $300 million in 2010, which is a relatively small figure given the revenues generated by competitors.

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