Introduction
India’s electronics manufacturing sector is at the forefront of the nation’s “Make in India” initiative, representing a critical pillar in the drive to establish India as a global manufacturing powerhouse. With ambitious targets and a rapidly evolving ecosystem, this sector has the potential to redefine India’s economic landscape.
Here are 10 key data points that highlight the current state and future aspirations of electronics manufacturing in India.
1. Job Creation: From Lakhs to Crores
In FY24, the electronics manufacturing sector employed approximately 13 lakh individuals.
By FY30, the government and industry stakeholders aim to increase this figure to 55 lakh jobs, a scale comparable to India’s current IT sector.
This anticipated growth underscores the sector’s role as a significant contributor to employment and skill development in the country.
2. Gross Value Addition (GVA): $100 Billion and Growing
India’s electronics manufacturing sector contributes around $100 billion in gross value addition (GVA). Of this, $86 billion comes from finished goods, while $14 billion is attributed to components.
This balance highlights the need to strengthen the domestic components ecosystem to reduce reliance on imports.
3. Contribution to GDP
Electronics manufacturing accounts for 3.4% of India’s GDP. This figure is expected to grow as the sector expands, driven by both domestic demand and export opportunities.
4. Exports: A Rising Star
In FY24, India exported approximately $25 billion worth of electronics. While this is a promising start, it also reflects the untapped potential for India to become a global export hub, particularly in high-value categories such as mobile phones and consumer electronics.
5. Imports: Bridging the Gap
India’s electronics imports stood at $90 billion in FY24, underscoring the need for a stronger domestic supply chain. Initiatives such as the Production Linked Incentive (PLI) scheme aim to address this gap by encouraging local manufacturing and investment in critical areas.
6. Mobile Phones: The Flagship Segment
Mobile phones account for 43% of India’s electronics manufacturing. This dominance is fueled by robust demand, government incentives, and the presence of global giants like Apple and Samsung, which have established significant manufacturing operations in the country.
7. iPhone Exports: A Milestone Achievement
In the first half of FY24-25, India exported $6 billion worth of iPhones. This achievement highlights the growing sophistication and quality of India’s electronics manufacturing capabilities.
8. Apple’s Impact
Apple’s suppliers in India produced $10 billion worth of iPhones in the first half of FY24-25. This production scale showcases India’s ability to attract and retain high-value manufacturing projects, setting the stage for further investments by global leaders.
9. Ambitious Goals: $500 Billion by FY30
India aims to quintuple its electronics manufacturing output from $100 billion to $500 billion by FY30. Achieving this target will require coordinated efforts in policy, infrastructure, and skill development, alongside fostering innovation and R&D.
10. Smartphone Assembly: A National Success Story
Approximately 97% to 99% of smartphones used in India are assembled domestically. This statistic reflects the success of initiatives like “Make in India” and the PLI scheme, as well as the growing capabilities of Indian manufacturers.
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Driving Factors Behind India’s Electronics Manufacturing Boom
1. Make in India and China+1 Strategy
The geopolitical landscape and global supply chain disruptions have positioned India as a viable alternative to China for electronics manufacturing. The “China+1” strategy adopted by global companies has brought significant investments to India.
2. Government Initiatives
Policies such as the PLI scheme, Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), and Modified Electronics Manufacturing Clusters (EMC 2.0) are driving investment and innovation in the sector.
3. Rising Domestic Demand
India’s burgeoning middle class and increasing digital adoption are fueling demand for consumer electronics, mobile phones, and IT hardware, creating a robust domestic market for manufacturers.
4. Export Opportunities
With global companies like Apple, Samsung, and Foxconn setting up operations in India, the country is poised to become a major exporter of high-value electronics, including smartphones and IT hardware.
5. Skill Development
Programs aimed at upskilling the workforce, such as the Electronics Sector Skill Council of India (ESSCI), are essential to meet the growing demand for skilled labor in the electronics manufacturing sector.
Challenges and the Road Ahead
While the growth trajectory is promising, challenges such as dependency on imports for critical components, lack of advanced R&D facilities, and infrastructure bottlenecks need to be addressed.
Strengthening the components ecosystem, fostering innovation, and enhancing ease of doing business will be crucial for achieving the $500 billion target by FY30.
Conclusion
Electronics manufacturing is not just a growth story; it is a testament to India’s potential to emerge as a global leader in high-tech manufacturing.
By leveraging its demographic dividend, policy support, and strategic location, India is well-positioned to lead the charge in the “Make in India” and “China+1” narratives, making the sector a cornerstone of its economic aspirations.
