In recent years, India has been making significant strides in its electronics and manufacturing industry. The nation’s ambition to establish itself as a global electronics manufacturing hub is underpinned by the Electronics System Design and Manufacturing (ESDM) policy, which has an outlay of Rs 76,000 crore ($10 billion). While there has been a lot of chatter around the semiconductor fab scheme, the display fab scheme, which has the same incentives, i.e., a 50% pari-passu subsidy, has not been talked about enough.
Electronics: The heart of India’s economic transformation
The electronics industry permeates all sectors of the Indian economy, making it a cornerstone of the nation’s economic and strategic growth. The global Electronics Manufacturing Services (EMS) market is projected to reach $1,145 billion by 2026 with a CAGR of 5.4% between 2021–26, driven by the proliferation of emerging technologies such as 5G, Internet of Things (IoT), Industrial Internet of Things (IIoT), Artificial Intelligence, Machine Learning, robotics, smart mobility, smart manufacturing, etc. India’s domestic demand for consumer electronics is also witnessing growth and is expected to touch $21.18 billion by 2025. Additionally, the country’s per capita GDP is set to cross $3,000 by 2025, further accelerating discretionary spending and fueling demand in the electronics sector. All this combined presents an excellent opportunity for India to innovate and capture a substantial share of this burgeoning market with both global and domestic demand. It is noteworthy that today, India is by far the largest importer of Liquid Crystal Displays (LCD) and the display fab subsidy presents a huge opportunity for India to reduce this dependence and achieve greater self-reliance in electronics manufacturing.
The LCD market: A shining opportunity
The global display market, which is anticipated to reach $187.8 billion by 2028, is a field of remarkable growth. Particularly, the LCD market, valued at $142.36 billion in 2022, is projected to soar to $231.75 billion by 2030. This expansion is driven by the increasing demand for displays in a wide range of applications, including smartphones, tablets, laptops, TVs, wearables, automotive displays, and medical devices. Although there is a shift towards newer display technologies like OLED, LCDs continue to be the dominant display technology globally and in India and are expected to remain so for years to come.
The Indian display market is strategically positioned to seize this opportunity. Anticipated to grow from $7 billion in 2020 to $15 billion in 2025, the market is expected to triple in size by 2030. To meet this surging demand, India requires at least 10-12 display fabrication units.
India’s policy for display
With its vast consumer market, a skilled workforce, and a business-friendly environment, India stands as an ideal candidate to become a global hub for display manufacturing. The Modified Display Fab policy is a strategic initiative aimed at fostering innovation, creating a conducive environment for investments in the display industry, and reducing India’s reliance on imported displays.
The policy offers a slew of financial incentives, including capital subsidies, reimbursement of central and state taxes and levies, and interest subvention on loans to eligible fabrication units. These incentives are designed to attract investments and make display manufacturing in India more competitive.
Few takers thus far
Currently, only a handful of companies have shown interest in building display fabs in India and one of them is the Vedanta Group. Owner of the leading Japanese display glass substrate manufacturing company AvanStrate Inc., Vedanta has partnered with Innolux for its proposed fabrication unit in Dholera, Gujarat. AvanStrate is among the top four LCD glass substrate manufacturers globally and holds more than 700 patents. Vedanta has also signed Memoranda of Understanding (MoUs) with 30 Japanese and 20 Korean companies, signaling strong international interest in partnering with India on this journey.
Another company in the foray is Elest (backed by Rajesh Exports) which has applied for the central government’s subsidy. Recently, leading global glass manufacturer Corning, which is known for its Gorilla cover glass, partnered with Indian company Optiemus. However, this is only for finished cover glass parts and not for display glass fabrication.
There will be more takers who will enter the market as the government has invited applicants under the Modified Display Fab Scheme earlier this year. The government also removed the INR 12,000 crore cap on maximum subsidy allocation, making the scheme more attractive for interested businesses.
A clear roadmap
The display subsidy in India could potentially revolutionize the nation’s economic landscape while also reducing the cost of electronics manufacturing and boosting domestic entrepreneurship. Just as South Korea’s investment in display glass fabrication technology propelled it to global eminence, India has a unique opportunity to replicate this success story. When South Korea, for instance, shifted its attention towards building a robust display glass fabrication industry, it witnessed an economic renaissance like no other. One of the most pivotal moments in this ascent was the successful development of innovative display technologies, including LCDs to start with and followed by OLEDs.
These innovations revolutionized the consumer electronics industry, making South Korea a dominant force in the global market. Today, South Korean giants like Samsung and LG are synonymous with top-tier display technologies and have established a significant global footprint. The boom in display glass technology translated into exceptional export figures, contributing to South Korea’s GDP.
India now stands at the crossroads, with the opportunity to replicate South Korea’s success by investing strategically in display technology. With the display subsidy and other supportive policies, India has the potential to transform its economic landscape, reduce import dependencies, and make its mark on the global stage—while fostering innovation and creating employment opportunities. As we look ahead at the trajectory of India’s electronics industry, localizing system design and manufacturing along with and strategic investments in display technology hold the key to India not only becoming Aatmanirbhar in electronics manufacturing but also a hub for electronics exports.
By Rajesh Mehta