Prime Minister Narendra Modi and US President Joe Biden joined hands for a semiconductor fabrication plant focused on advanced sensing, communication, and power electronics for national security, amongst other uses. But, how will semiconductors strengthen India’s national security?
Strategic electronics
The large-scale modernisation of the defence forces and the drive to manufacture locally have become focus areas of the government. The strategic electronics segment consists of military communication systems, radars and sonars, network-centric systems, electronic warfare systems, weapon systems, satellite-based communication, navigation and surveillance systems, navigational aids, underwater electronic systems, infrared-based detection and ranging systems, disaster management systems, internal security systems, and more.
“Emerging technologies are going to reshape modern-day warfare, and will harness the power of electronics to do so. This will make the Indian strategic electronics sector, mainly comprising aerospace and defence, a vibrant industry over the next decade,” the Ministry of Electronics and Information Technology said in its annual report for 2023-24. The next decade will likely see exponential growth in combat systems and non-platform-based programmes, facilitating smart battalions, the report added.
India has already taken steps in the direction of manufacturing strategic electronics. The production was around Rs 18,000 crore in FY2016, Rs 23,560 crore in FY2018, Rs 32,800 crore in FY2020 and Rs 39,363 crore in FY2023.
Electronics production skewed towards mobile phones
Electronics production in India rose by more than twice in five years between FY2018 and FY2023. During the same duration, electronics exports rose 4.6 times. In FY2023, electronics production in India stood at Rs 8.25 lakh crore. However, imports were still high at Rs 6.21 lakh crore. The government aims to cut down on imports and manufacture indigenously.
At present, over 42 per cent of electronics manufacturing is concentrated towards mobile phones. Of the Rs 8.25 lakh crore worth of overall electronics production, mobile phones accounted for Rs 3.50 lakh crore.
Industrial electronics and consumer electronics such as TV, audio, and accessories accounted for 12 per cent each. At Rs 39,363 crore, strategic electronics accounted for nearly five per cent share. The government now aims to boost its strategic electronics share in overall electronics production.
High import dependence for semiconductors
While India has walked quite a distance in terms of electronics production, heavy semiconductor imports still worry India’s electronic ecosystem. India imports 95 per cent of its semiconductors from countries like China, Taiwan, South Korea, and Singapore, according to the International Trade Administration.
Total semiconductor imports, including electronic integrated circuits, sim cards, diodes, transistors, photosensitive semiconductor devices, etc, stood at USD 28.7 billion in FY2024, according to the Ministry of Commerce & Industry. This is more than twice the import level of FY2021.
China, Hong Kong and Taiwan, alone accounted for 63 per cent of India’s overall semiconductor imports in FY2024. Singapore and South Korea followed in the list.
Meanwhile, PM Modi inaugurated SEMICON India 2024 with the theme “Shaping the Semiconductor Future” in Greater Noida earlier this month.
Source Agencies
