Rajeev Chandrasekhar, Minister of State, Ministry of IT and Electronics told Business Today that former RBI Governor Raghuram Rajan’s criticism of semiconductor PLI is misplaced and that today semiconductors pose geopolitical, national security and economic concerns.
Rajan has been voicing his concerns against the Production Linked Incentives (PLI) to boost electronics manufacturing and setting up semiconductor fabs in India. This criticism comes at a time when electronic exports from India were around Rs 45,000 crore, mostly dominated by Apple and Samsung.
Chandrasekhar said, “I think he (Rajan) is just flailing around and trying to make sense of this contradiction. I mean to say that semiconductors, which is such a geopolitical, national security, economic security issue, instead of that investment, we should build more colleges and universities. I can either rebut him, or I can say, God, save whomever he’s advising or whoever’s advising him. They are desperate to become relevant. They want to be part of these conversations. And frankly, they have nothing to contribute to this conversation. He was against the mobile phone PLI. I wrote an edit against him and exposed him. Obviously, he had done no research.”
According to Chandrasekhar, India has come a long way and is going to get to a situation next year where mobile phones are going to constitute exports worth Rs one lakh crore and in the top exported products from India. Currently, the top 10 exported products from India include petroleum products, jewellery, automobile, textiles, and more.
Chandrasekhar further added: “These are the people who, unfortunately, are footnotes in history now. And not every complimentary footnote in history. His time in the RBI was the worst economic disaster and the meltdown ever in the history of India. And he now wants to sit in Davos and give advice about the economy. I think he is better off giving advice to Pakistan, Bangladesh or some other country.”
IT Minister Ashwini Vaishnaw too told Business Today: “Raghuram Rajan is a very well-known economist. I respect him a lot. But, when people marry electronics, economics with politics, their views change. The person who says that we should not be promoting manufacturing in this country, would you take his argument seriously? Had he been a neutral, professional economist, I would like to get into g a debate with him. But today, he is coloured by his affiliation for a particular political party; rather than giving a professional economic rationale, he is giving politically coloured arguments.”
India’s imports from China may have risen over the last two years, even after the Aatmanirbhar Bharat story with various PLI schemes. Still, in some way, it is proving to be a lifesaver for the smartphone industry. India exported Rs 45,000 crore worth of mobile phones in FY22, and up to November 2022, mobile phone exports have already crossed Rs 40,000 crore, which is more than double the exports made during the same period last year. Per Niti Aayog, mobile phone manufacturing rose to approximately 31 crore units in 2021-22.
“PLI has boosted the low end of the component ecosystem, including, for instance camera modules, chargers, packing, among others. Thanks to PLI, the local value addition in India has increased to 15%,” Prabhu Ram, Head of Industry Intelligence Group (IIG), CyberMedia Research (CMR) told Business Today.
However, India is still dependent on imports of high-end components such as high-quality displays, which can also be addressed with time with schemes supporting display manufacturing in the country.