Tamil Nadu has set its sights on becoming a production base for at least half the total number of manufacturers in the electronics supply chain, said the state's industries minister in a chat with CNBC-TV18.

Share Market Live

NSE

"I am told we've reached about 20 percent of component manufacturers," said TRB Rajaa, Tamil Nadu's minister for industries and investment promotion, "We want to push that to at least 50 percent in the near future." He added that cracking the entire supply chain of top electronics majors and increasing the number of manufacturers entering the state's supply chain were his priorities.

Rajaa's comments came only days after Tamil Nadu edged ahead of other states in terms of electronics exports. The state exported electronic goods worth $5.37 billion in FY23, according to data from the National Import-Export Record for Yearly Analysis of Trade (NIRYAT), which was nearly three times its export number of $1.86 billion in FY22.

Tamil Nadu also accounted for 22.8 percent of India's electronics exports of $23.57 billion last fiscal, nearly doubling its 11.98 percent share in national electronics exports in FY22.

Should the plan to attract more manufacturing players fructify, Rajaa forecasts steady growth in electronics exports in the next three to four years — even possibly a "double-digit" billion dollars in export value versus the $5.37 billion in electronics exports that Tamil Nadu accounted for in FY23.

For such exponential growth to happen, Tamil Nadu will have to keep winning new manufacturing contracts, in addition to seeing existing contracts translate to production activity on the ground. At present, the state has top electronics manufacturers Foxconn and Pegatron manufacturing smart-phones, including Apple iPhones, a large percentage of which is exported.

'Talking to electronics majors in US & Taiwan'

The state's ability to rake up better export numbers in electronics, Rajaa said is on account of its existing status as an EV manufacturing hub. "When more EV manufacturers step in, the demand for electronics is going to pick up; when more smart-phone manufacturers come in, their production will also increase."

While the minister confirmed that talks are on with more electronics majors from the United States and Taiwan to set up base in Tamil Nadu, he refused to divulge names.

"I'm looking at really big numbers from the electronics sector, and we are encouraging more and bigger players to come in," said Rajaa, "We are talking to a few (electronics) giants during our next visit to the US, and there is a lot of interest from component manufacturers in Taiwan too."

Should Tamil Nadu's export value in electronics rise exponentially in line with the minister's estimates, there is scope of the state accounting for close to 50 percent of the country's electronics exports, which is around its present-day export share in computer peripherals like keyboards, scanners, monitors and printers.

First Published:Jul 6, 2023 7:14 PM IST