India’s Tech Industry Set to Boom with Government Support and Competitive Labour Costs
A recent report by Nomura reveals that India’s tech industry is experiencing growth similar to the early tech developments in countries like the U.S. and Taiwan. The report identifies key success factors such as government support, cost-competitive labour, and the presence of innovative and determined players.
The Indian government is playing a crucial role by providing robust support for the localization of manufacturing and exports through various schemes, including the Production Linked Incentive (PLI) scheme and import restrictions. These initiatives are essential for the growth of the tech industry in India.
According to the report, India’s labour costs are 20-50% cheaper than in Vietnam and Thailand, making it an attractive destination for tech investment. Additionally, India’s neutral stance in the ongoing U.S.-China tech rivalry has made it an appealing partner for both Western and Asian tech leaders.
The report forecasts significant growth in India’s electronics production, projecting an increase from USD 115 billion in FY24 to USD 450 billion by FY30, driven by PLI schemes, reduced reliance on Chinese imports, and increasing domestic consumption.
Doubts Revealed
Nomura -: Nomura is a financial services group and global investment bank based in Japan. They provide research and reports on various industries, including technology.
Production Linked Incentive (PLI) scheme -: The Production Linked Incentive (PLI) scheme is a program by the Indian government to encourage companies to boost their production in India by offering financial incentives.
U.S.-China tech rivalry -: The U.S.-China tech rivalry refers to the competition between the United States and China in the technology sector, where both countries are trying to be the leaders in tech innovations and production.
USD 115 billion -: USD 115 billion means 115 billion U.S. dollars, which is a way to measure a large amount of money. It shows how much India’s electronics production is worth in the financial year 2024.
FY24 -: FY24 stands for Fiscal Year 2024, which is a one-year period that governments and businesses use for accounting and budget purposes. It usually starts on April 1, 2023, and ends on March 31, 2024, in India.
USD 450 billion -: USD 450 billion means 450 billion U.S. dollars, which is a way to measure a very large amount of money. It shows the expected value of India’s electronics production by the fiscal year 2030.
