India’s electrical and electronics manufacturing sector is poised for a transformative leap, propelled by a strategic “Green Blueprint” that integrates sustainability with Industry 4.0 principles. This ambitious plan emerges amidst a challenging global trade landscape, particularly new reciprocal tariffs imposed by the United States from April 2025. With a national target of producing goods worth ₹25,673 billion by 2025–26, significantly raising its GDP contribution, this green strategy is not merely a defensive reaction to tariffs but a forward-looking vision to establish India as a global leader in eco-friendly and economically resilient manufacturing, critical for building truly sustainable cities.
The burgeoning aspirations of India’s electronics sector are currently being tested by evolving international trade dynamics. The US’s imposition of a 10% baseline and a 26% reciprocal tariff on most Indian goods directly threatens India’s electronics exports, which stood at a robust ₹7,696 billion in FY24. Preliminary estimates from the Global Trade Research Initiative (GTRI) suggest this could lead to a significant 6.41% drop in electronics exports, potentially reducing India’s GDP by up to 0.4%. This external pressure necessitates a rapid and strategic pivot towards domestic fortitude and sustainable practices to maintain competitiveness and ensure long-term economic stability.
At the heart of India’s response lies a sophisticated interplay of strategic policy levers and a commitment to localisation. The Union Budget 2025–26 introduced pivotal tariff reforms, simplifying customs duties into eight slabs and notably exempting 63 critical capital goods for EV and mobile battery manufacturing from Basic Customs Duty (BCD). This bold move is projected to save 5–15% on component imports valued at ₹1,028 billion in FY24. Complementing this is the ₹231 billion Production-Linked Incentive (PLI) scheme, meticulously designed to catalyse local production of crucial sustainable components such as lithium-ion cells, semiconductors, and EV motors. While targeted US tariff exemptions on smartphones, semiconductors, and clean energy (worth ₹1,748 billion) offer some immediate relief, India’s enduring resilience will stem from its unwavering focus on indigenous production, widespread digital adoption, and ingrained sustainability.
The core of India’s Green Blueprint is a fundamental shift from import-heavy production to a circular, resilient manufacturing model. The plan anticipates substituting nearly ₹2,948 billion worth of FY24 component imports with domestic production, potentially yielding savings of ₹181–₹290 billion (5–15%) through various eco-conscious practices. For instance, replacing ₹1,028 billion in imported Printed Circuit Boards (PCBs) with domestic multi-layer alternatives, coupled with innovative reuse via IoT and AI testing, could save up to ₹154 billion and significantly curb e-waste. Similarly, domestic fabrication of semiconductors under the PLI scheme aims to cover 45% of smartphone costs (₹514 billion), with reuse and material recovery contributing an additional ₹26–₹51 billion in savings. Localising components like passive resistors, capacitors, and display/camera modules, along with embracing eco-friendly materials for enclosures, further solidifies this sustainable supply chain, reducing both costs and environmental impact.
Accelerating efficiency and resilience across the sector hinges on widespread adoption of Industry 4.0 technologies. Artificial Intelligence (AI), Internet of Things (IoT), and real-time tracking, in alignment with the National Manufacturing Mission (NMM), are projected to slash energy and downtime costs by 20–30% (equivalent to ₹51 billion annually), concurrently boosting productivity by 15–20% (resulting in ₹154 billion in output). These smart manufacturing tools are vital for resource optimisation and reducing the carbon footprint of production facilities, essential for constructing zero net carbon cities.
A critical pillar of this sustainability drive is robust e-waste management. With India generating approximately 1.751 million metric tonnes of e-waste in 2023-24, formalising the largely informal e-waste ecosystem and investing ₹100 billion in recycling infrastructure are paramount. Projections suggest that effective recycling and reuse could save ₹5 billion annually in disposal costs. Implementing modular product design and stringent Extended Producer Responsibility (EPR) norms will be crucial to support this circular economic shift, ensuring that end-of-life products are re-integrated into the value chain, fostering a truly eco-friendly lifecycle.
Fueling long-term innovation requires substantial investment in Research and Development (R&D). Currently, India’s R&D expenditure at just 0.7% of GDP (₹1,725 billion) lags significantly behind global leaders like South Korea (4.5%). An annual R&D boost of ₹514 billion could yield a 10% productivity gain (₹2,567 billion), particularly in critical areas like semiconductors, sustainable materials, and battery recycling. The PLI scheme already earmarks ₹51 billion for R&D. With the right incentives, India possesses the potential to attract up to ₹1,028 billion in foreign R&D investments by 2030, enhancing its innovation ecosystem and improving its global innovation ranking.
India’s green blueprint is a comprehensive, phased strategic vision for sustainable industrial growth. In the short term, the focus is on scaling domestic production by 10%, investing ₹100 billion in recycling plants, and formalising informal e-waste handling. Over the next two to three years, the medium-term strategy involves improving logistics, trade, and MSME financing to boost output by 20%. By 2030, the long-term goal is to achieve the 25% GDP contribution target (₹61,614 billion of projected GDP), aided by 30% export growth and enhanced global competitiveness. Through coordinated policy execution, focused R&D investment, and seamless Industry 4.0 integration, India’s electrical and electronics sector is firmly positioned to meet its 2030 vision, redefining India’s role in the global value chain as a benchmark for green, competitive manufacturing. This holistic approach promises not just economic prosperity, but also healthier, more equitable, and environmentally conscious urban centres for future generations.
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