US $4.6 billion (RM18.65billion) of electronics component investments in India have been given clearance as the Narendra Modi government tries to establish local supply chains and compete with China.

Under its Electronics Components Manufacturing Plan, the Ministry of Electronics and Information Technology approved 22 proposals, which are estimated to produce 2.58 trillion rupees (US$28.6 billion or RM120 billion) of output, according to a government statement on 2nd January.

The approved projects involve giants like Samsung and Tata Electronics and the production of 11 specific products targeted for use on mobile phones, telecommunication equipment, consumer electronics, automobiles, and IT hardware.

According to the ministry, the projects are likely to enhance the domestic supply chains and reduce the reliance on imports. The Modi government is also striving to localise production of high-value sub-assemblies like camera and display modules to make India less vulnerable to external shocks in the electronics supply chain. 

The relocation will happen at a time when Apple Inc. is increasing the size of the local factories that assemble iPhones, following the relocation of most of its production to India instead of China to avoid tariff risks. Electronic goods have thus far been exempt from the stiffer levies, though India is paying some of the highest US tariff rates in the world.

The government passed a proposal in November to establish a unit to manufacture mobile phone enclosures or metal casting by Aequs, a supplier of Apple.

Four fabric manufacturing units will begin commercial manufacturing this year, comprising those of Micron and Tata, the Electronics Minister Ashwini Vaishnaw added on Friday.