Historical Context (1980s-2010s)
Early Beginnings
India’s electronics journey began in the 1960s with the establishment of public sector units like Bharat Electronics Limited (BEL) and Electronics Corporation of India Limited (ECIL). However, the industry remained largely focused on defense and telecommunications equipment with limited consumer electronics production.
The Lost Decades (1990s-2000s)
Despite the IT services boom, India missed the global electronics manufacturing wave. Key challenges included:
- – High import duties on components
- – Complex regulatory framework
- – Inadequate infrastructure
- – Limited skilled workforce
- – Absence of a comprehensive electronics policy
Import Dependency Crisis
By 2010, India had become the world’s second-largest importer of electronics, with imports reaching $45 billion while exports remained minimal at $5 billion, creating a massive trade deficit.
Present State (2014-2025)
Market Size and Growth
- Current Market Value: $155 billion (2024) [Industry estimates]
- Production Value: Over 8.2 trillion Indian rupees (approximately $101 billion) in 2023 [Statista, 2024]
- Annual Growth Rate: 15-20% [Industry reports]
- Employment: Over 4.5 million people directly employed [Government data]
- Export Growth: Electronics exports have surged from INR 382.6 billion (US$4.5 billion) in 2014-15 to INR 2.41 trillion (US$28.45 billion) in 2023-24, reflecting a CAGR of 22.7 percent [Ministry of Electronics and IT]
Key Segments
- Mobile Phones: Largest segment accounting for 50% of production. India’s smartphone market grew 4% YoY in 2024, with shipments reaching 151 million units [IDC Worldwide Quarterly Mobile Phone Tracker]
- Consumer Electronics: TVs, audio systems, home appliances – Consumer electronics market valued at USD 80.8 billion in 2024, expected to reach USD 149.1 billion by 2033 [Custom Market Insights, 2024]
- Electronic Components: Semiconductors, PCBs, displays
- Industrial Electronics: Medical devices, automotive electronics
- IT Hardware: Laptops, tablets, servers
Manufacturing Hubs
Tamil Nadu: Chennai (mobile phones, components)
Karnataka: Bengaluru (IT hardware, R&D)
Uttar Pradesh: Noida, Greater Noida (mobile manufacturing)
Haryana: Gurugram, Manesar (automotive electronics)
Andhra Pradesh: Sri City (electronics manufacturing)
Gujarat: Ahmedabad (electronic components)
Government Initiatives and Policy Framework
National Policy on Electronics (NPE) 2019
Vision: Position India as a global hub for Electronics System Design and Manufacturing (ESDM) [Prime Minister’s Office, 2019]
Targets by 2025 [Official Government Document]:
- Turnover of $400 billion (approximately INR 26,00,000 crore)
- Targeted production of 1.0 billion (100 crore) mobile handsets valued at $190 billion
- Exports of $120 billion
- Employment for 10 million people
Major Government Schemes
Production Linked Incentive (PLI) Scheme
Launch: 2020
Budget: ₹76,000 crores across multiple sectors
Coverage:
- Mobile manufacturing and components
- IT hardware (laptops, tablets, servers)
- Telecom equipment
- Electronic components and semiconductors
Latest Updates (2024-2025):
- New PLI scheme worth ₹22,919 crore approved for electronic components manufacturing
- Mobile phone exports rose from ₹228 billion (2020-21) to ₹1.2 trillion (2023-24), achieving 78% compound annual growth rate
- Industry seeks additional ₹35,000 crore PLI support to increase domestic value addition from 18% to 35-40% in mobile manufacturing
Success Metrics:
- Mobile exports increased from $2.6 billion (2020-21) to $14.4 billion (2023-24)
- Apple iPhone production value crossed $7 billion in India
Modified Special Incentive Package Scheme (M-SIPS)
- Capital subsidy of 20-25% for investments in electronics manufacturing
- Reimbursement of countervailing duty/excise duty for 10 years
Electronic Manufacturing Clusters (EMC)
- Development of world-class infrastructure for electronics manufacturing
- 20+ EMCs approved across different states
Design Linked Incentive (DLI) Scheme
- Budget: ₹76,000 crores over 6 years
- Focus: Semiconductor design, chip development, and R&D
State-Level Initiatives
- Tamil Nadu: Electronics hardware manufacturing policy with land allocation and subsidies
- Karnataka: Aerospace and Electronics Policy with focus on R&D
- Uttar Pradesh: Electronics manufacturing policy with single-window clearance
- Telangana: T-Hub for electronics startups and innovation
Key Indian Industry Leaders
Manufacturing Companies
- Dixon Technologies: Leading ODM/EMS player
- Amber Enterprises: Air conditioning and consumer appliances
- Voltas: Home appliances and cooling solutions
- Havells: Electrical equipment and consumer durables
- Bajaj Electricals: Consumer appliances and lighting
Semiconductor and Components
- Tata Electronics: Semiconductor assembly and testing
- Vedanta-Foxconn: Joint venture for semiconductor manufacturing
- L&T Semiconductor: Chip design and manufacturing services
- Saankhya Labs: Semiconductor design for broadcast and broadband
Contract Manufacturing
- Foxconn India: Major iPhone assembler
- Wistron: Apple supplier for iPhone assembly
- Flextronics: EMS services
- Jabil: Electronic manufacturing services
Global Context and Competition
Global Electronics Manufacturing Landscape
Total Market Size: $2.4 trillion globally
Major Manufacturing Hubs:
- China: 28% of global production
- South Korea: 12% of global production
- Taiwan: 8% of global production
- Japan: 7% of global production
- India: 3% of global production (2024)
China Plus One Strategy
The global supply chain diversification post-COVID-19 has benefited India:
- Companies relocating: Apple, Samsung, Xiaomi, Oppo, Vivo
- Geopolitical tensions: US-China trade war accelerating relocation
- Supply chain resilience: Companies seeking alternative manufacturing bases
Competitive Advantages
- Large domestic market: 1.4 billion consumers
- Cost-competitive labor: 30-40% lower than China
- English-speaking workforce: Advantage in global operations
- Government support: Strong policy backing and incentives
- Democratic stability: Predictable business environment
Challenges Against Global Competition
- Infrastructure gaps**: Power, logistics, ports
- Component ecosystem**: Heavy dependence on imports (70%)
- Skilled workforce**: Need for technical training
- R&D investment**: Lower than global competitors
- Ease of doing business**: Regulatory complexities
Future Outlook and Projections
Market Projections
- 2025: $300 billion market size, $120 billion production
- 2030: $500 billion market size, $300 billion production
- Export potential: $100+ billion by 2030
Emerging Opportunities
Semiconductor Manufacturing
- India Semiconductor Mission: $10 billion incentive package
- Major Projects Progress (2024-2025):
- Micron Technology: $2.75 billion OSAT facility in Sanand, Gujarat – first chips expected by mid-2025
- Tata Electronics: ₹27,000 crore ATMP facility in Morigaon, Assam – capacity of 48 million chips daily
- CG Power: ₹7,600 crore ATMP facility in partnership with Renesas Electronics – capacity of 15 million chips daily
- Fab facilities: 3-4 major fabs planned by 2030, with Tata’s mega semiconductor fab approved for Dholera, Gujarat
- Compound semiconductors: Focus on GaN, SiC for 5G and automotive
- Electric Vehicle Electronics
- EV adoption: 30% of vehicle sales by 2030
- -Battery manufacturing: Gigafactory investments
- Charging infrastructure: Electronics for EV ecosystem
- 5G and Telecom Equipment
- 5G rollout: Massive infrastructure upgrade
- Indigenous 5G: Development of Indian 5G technology stack
- Network equipment: Import substitution opportunities
- Defense Electronics
- Atmanirbhar Bharat: Self-reliance in defense
- Offset requirements: Technology transfer and local production
- Export potential: Defense electronics to friendly nations
Strategic Initiatives for 2025-2030
- Semiconductor Ecosystem Development
- Establish 3-4 major semiconductor fabs
- Develop compound semiconductor capabilities
- Create 50+ chip design companies
- Build complete supply chain ecosystem
- Component Localization
- Reduce import dependency from 70% to 40%
- Develop local PCB manufacturing
- Establish display manufacturing facilities
- Build passive component manufacturing base
- R&D and Innovation
- Increase R&D spending to 3% of turnover
- Establish 20+ electronics R&D centers
- Create university-industry partnerships
- Develop IP and patents portfolio
- Skill Development
- Train 1 million skilled technicians
- Establish electronics-focused ITIs
- Create industry-academia partnerships
- Develop advanced manufacturing skills
Investment Landscape
Foreign Direct Investment (FDI)
- Total FDI (2014-2024): $15+ billion in electronics
- Major investors: Foxconn, Samsung, Apple, Xiaomi
- Investment pipeline: $25+ billion committed for 2024-2027
Government Investment
- PLI allocation: ₹76,000 crores approved
- Infrastructure development: ₹50,000 crores for EMCs
- Semiconductor mission: ₹76,000 crores over 6 years
Private Sector Investment
- Tata Group: $2 billion in semiconductor and electronics
- Reliance: $1.5 billion in electronics manufacturing
- Adani Group: $1 billion in data center and electronics
Challenges and Risk Factors
Short-term Challenges (2025-2027)
- Supply chain disruptions: Geopolitical tensions
- Skilled workforce shortage: Technical talent gap
- Infrastructure bottlenecks: Power, logistics, water
- Component import dependency: 70% imports continue
Medium-term Challenges (2027-2030)
- Technology advancement**: Keeping pace with global innovation
- Competition from Vietnam/Mexico**: Alternative manufacturing bases
- Environmental regulations**: Sustainability requirements
- Trade policy changes**: Global trade dynamics
Long-term Strategic Risks
- Technological disruption: New manufacturing technologies
- Geopolitical shifts: Changes in global supply chains
- Climate change impact: Environmental sustainability
- Automation: Impact on employment-intensive manufacturing
Success Metrics and KPIs
Current Performance (2024-2025)
- Production: Over 8.2 trillion Indian rupees (approximately $101 billion) [Statista, 2024]
- Exports: INR 2.41 trillion (US$28.45 billion) [Ministry of Electronics and IT]
- Employment: 4.5 million
- FDI: Rs. 49,068 crore cumulative (US$ 5.67 billion) [IBEF, 2024]
- Component import dependency: Reduced from 85% to 70%
- Mobile manufacturing: Surged 21 times to reach US$ 49.3 billion [IBEF, 2024]
Targets for 2030
- Production: $300+ billion
- Exports: $100+ billion
- Employment: 10+ million
- Global market share: 8-10%
Conclusion
India’s electronics manufacturing industry stands at a critical juncture with unprecedented opportunities driven by global supply chain shifts, strong government support, and a large domestic market. The successful implementation of PLI schemes, development of semiconductor capabilities, and creation of a robust component ecosystem will determine India’s ability to become a global electronics manufacturing hub.
The industry’s transformation from a net importer to a significant exporter in mobile phones demonstrates the potential for replicating this success across other electronics segments. However, sustained focus on infrastructure development, skill creation, R&D investment, and policy consistency will be crucial for achieving the ambitious targets set for 2030.
With the right strategic execution, India has the potential to capture 8-10% of global electronics production and emerge as the world’s third-largest electronics manufacturer after China and South Korea by 2030.
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