Ind-Ra notes that, while the ADD has created favourable short- to medium-term conditions for Indian producers, structural challenges remain. "Chief among these is India’s continued dependence on imported copper-clad laminates (CCLs)—a key raw material for PCB manufacturing—primarily sourced from China. Resin, the other major component, is readily available domestically, but without local CCL production, full value addition and margin expansion will remain limited."
The rating agency expects that even after the ADD expires in 2029, Indian PCB manufacturers will likely retain their competitive edge if investments in domestic capacity and backward integration continue. Already, capacity utilisation has improved significantly—from 50%-65% a year ago to 70%-90% now—helping firms absorb fixed costs better and improve EBITDA (earnings before interest, taxes, depreciation and amortisation) margins.
"However, it is the production linked incentive (PLI) scheme that has emerged as the most effective, with a total outlay of Rs4,09,510mn (million), albeit only Rs2,500mn earmarked for electronic components including PCBs. Despite limited participation in the PCB segment—benefiting just four to five large players—the investments have already crossed Rs5,500mn."
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