Path to Self Reliance

In Covid times, our Prime minister, Mr. Narendra Modi has given slogan of self reliant India. What does that mean? Does it mean that we produce everything what we need internally in India? Now the question arise, is it possible? Can we do that? 
In entirety i don't think this is possible even and we have to depend on outside world for some of our needs. Biggest share of our imports are crude oil, electronics, precious metal & machinery. Out of these we can't produce crude oil or previous metals as they are mostly located in few geographies only. Electronics is one area where imports have grown exponentially in recent past and it will continue to grow in near future also. Can we make everything that we need in electronics? I will let you to decide. Let me take one example of mobiles phones in this category and iphone in particular, though this is more or less same for other mobile devices makers.
Mobile phone required following.
  1. Chipset, Apple uses its own Application processor and for modem depends on Qualcomm or Intel. All these 3 companies are US companies and their design happens in USA, Europe, India, China etc.
  2. These chipsets are manufactured by other companies like TSMC(Taiwan), Samsung(South Korea) or by Intel itself in USA, Vietnam etc.
  3. Memory, these are made by Hynix or Samsung both in South Korea.
  4. Display, again made by Samsung in South Korea.
  5. Camera sensors are from Sony(Japan)
  6. Batteries from Sunwoda(China)

Device design happens across the globe but major part happens in USA and finally assembly is done by Foxconn(Taiwan company operating in China) in China & and other smaller components are also sources from China. Whatever assembly happening in India is mostly limited to affixing the screen on top of PCB and insert battery boxing the devices with charger, headphones etc.

Considering above situation can India make considering all the complexities, expertise etc. Can India be self reliant? I doubt NO. What can India do then? Increase its value addition in this Global supply chain. 
  • Incentivise the full assembly of the devices in India starting from PCB and see the small component manufactures(PCB, audio jack, speakers, registers/capacitors  etc.) setup the base in India and start local production. This doesn't need much capital but some support. 
  • Then incentivise setting up Fabs to manufacture chipsets which requires billions of dollorss in capex initially and every year for process node upgradation.
  • Create environment for Indian and MNCs to do R&D & create IP and make new products or improve on existing once.
There is no way we can make the best product(including all its component) in India at competitive price, we have to collaborate with others but what we need is to become inseparable part of global value chain and move up into value addition of global value chain.



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