Page 76 - Edelweiss India Conference 2022 FLIPBOOK

THE NEW EDGE

While the Indian government and the industry expects domestic EMS manufacturing to
exceed USD52bn by FY26E (~4x current size, a CAGR of 30%), the same implies an EMS
production scale of USD176bn by FY30 (~12x current size, a CAGR of 36%).

Electronics PLI: 20% of overall PLI and one-third of last
5Y capex

PLI for electronics - accounting for a large share

Others, 2,724
(80%) 1 2 3

BSE500 Capex Total PLI Electronics
(ex-services) investment PLI investment
USD150bn (30.6%) (6.2%)
INR3,418bn INR694bn

PLI for Electronics, 694
(20%)

Source: Investindia.gov.in, Edelweiss Research (Note: Figures in INR bn)
Source: Pib.gov.in, Edelweiss Research

Of the estimated total PLI investments of ~USD45bn, electronics accounts for a healthy
~USD9bn (20%), clearly topping the government’s expectation to make India a global
manufacturing hub for EMS manufacturing.

Also, if one compares the total capex incurred by BSE500 companies (ex-services)
The PLI initiatives amounting to ~USD150bn over FY15–20, PLI for electronics and components alone is
are likely to attract pegged at ~USD9bn, suggesting a clear uptick in the manufacturing capex pace. Net-net,
INR9bn into electronics PLI investments would account for ~31% of the total capex incurred from FY15–20.
manufacturing supply
chain over the next
PLI’s potential impact on renewable energy

products In total, 18 companies with cumulative capacity of 54.8GW had applied for the scheme.
Three companies won the bids for total capacity of 12GW, for which incentives of INR45bn

manufacturers, the government has decided to enhance the funding under the PLI scheme
for domestic solar cells to INR240bn as against INR45bn earlier.

The aforementioned qualifying bidders were based on three parameters: i) the extent of

modules. This is important to cutting imports-dependence in light of the following.

74 Edelweiss Securities Limited