India’s Rise as a Dominant Player in Global Electronics Manufacturing

India has emerged as a significant player in the global electronics manufacturing landscape. With the government’s relentless efforts to promote domestic electronics production, the nation is rapidly evolving into a thriving electronics manufacturing hub, set to reach a colossal $300 billion industry by 2025-26.

The global electronics manufacturing services (EMS) market is on an impressive trajectory, projected to touch $1,145 billion by 2026 with a compelling CAGR of 5.4% during the 2021-2026 forecast period. India, in particular, has witnessed a substantial uptick in its domestic demand for consumer electronics, which is anticipated to reach $21.18 billion by 2025, up from $9.8 billion in 2021. Notably, India boasts the world’s second-largest smartphone market, with over 1.3 billion mobile phone users, presenting a goldmine of opportunities for businesses and investors keen on tapping into smartphone and electronic device manufacturing.

Auto EV India

A pivotal force driving India’s electronics manufacturing drive is the Production-Linked Incentive (PLI) scheme. This visionary initiative is designed to boost domestic manufacturing and the export of electronic products. Under the PLI scheme, companies are offered incentives on incremental sales achieved from products manufactured in India over the base year. A significant allocation of approximately $5 billion, INR 40,951 crore, was directed toward the country’s large-scale electronic manufacturing (LSEM) sector under this scheme. This has spurred substantial investments, with global electronics giants, including Samsung and Apple, establishing manufacturing facilities in India. In December 2022, Apple set a remarkable milestone by becoming the first smartphone company to export iPhones worth $1 billion in a single month.

India’s prowess in electronics manufacturing is unmistakably reflected in its growing exports. The electronics sector is the fastest-growing segment in India’s export arena, with smartphones leading the charge. In the fiscal year 2022-2023, India achieved the remarkable feat of surpassing $10 billion in smartphone exports. This accomplishment underscores India’s competitiveness on the global stage, challenging established manufacturing hubs like China and South Korea. An astounding 97% of smartphones sold in India are domestically produced, and exports have surged by over 139% in the past three years. The recent announcement of the Electronics Manufacturing Cluster (EMC) in Dharwad, Karnataka, with an investment of approximately $21.98 million (INR 180 crore), is a substantial step towards India’s self-reliance mission (Atmanirbhar Bharat) and is expected to generate over 18,000 jobs.

Key government initiatives aimed at boosting domestic electronics production include the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), offering financial incentives for the production of electronic components and semiconductors. The Modified Electronics Manufacturing Clusters (EMC 2.0) initiative seeks to establish world-class infrastructure for electronics manufacturing. Additionally, the liberalization of foreign direct investment (FDI) policies, allowing up to 100% FDI for electronics manufacturing, has attracted a slew of global companies to invest in India.

Another vital factor contributing to India’s rise as an electronics manufacturing powerhouse is its highly skilled workforce. India boasts a substantial pool of technical and engineering talent, with leading universities offering specialized courses in electronics and engineering. This has made India a magnet for multinational corporations looking to establish research and development (R&D) centers and manufacturing plants in the country.

With unwavering support from the Indian government and key initiatives in place, the country has successfully propelled domestic manufacturing and turbocharged exports. The game-changing Production-Linked Incentive (PLI) scheme, coupled with substantial investments from global electronics giants, is propelling India toward its destiny as a major electronics manufacturing hub.

scroll to top