One of the fastest growing markets in the world is electronics market specially the consumer electronics market. In fact, out of top 10 richest companies in the world companies like apple, Microsoft, Nvidia, amazon and meta they produce electronics.
WE are moving to a world that is heavily depended upon electronics. From the cars we drive to microwave we use to heat food is made with electronics. That how much we humans are attached to electronics. Electronics Manufacturing Industry serves as a back bone to these companies. The global electronics manufacturing industry is set to grow at a rate of CAGR of 7.4% to reach USD 1017.85 billion by 2032 as per fortune business.
India is one of the attractive markets for global leaders and brands. India is emerging as one of the fastest growing power house in electronics manufacturing. This growth is driven by favorable government policies and eco system suitable for electronics manufacturing.
India’s strategic initiatives, favorable policies, and robust talent pool are driving its ascent as a global electronics manufacturing hub.
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The Indian Electronics Manufacturing Landscape
India’s electronics manufacturing industry has been witnessing significant growth in recent years, driven by favorable government policies, increasing domestic demand, and a skilled workforce. In 2023, India’s electronics production reached a substantial US$102 billion, with a component and sub-assembly demand of US$45.5 billion. This demand is projected to soar to US$240 billion by 2030, aligning with the government’s ambitious target of achieving US$300 billion in electronics production by 2025-26.
Key Trends Shaping the electronics manufacturing Industry in India.
- Government Initiatives: The Indian government has introduced several initiatives, such as the Production-Linked Incentive (PLI) scheme, to boost domestic manufacturing and reduce reliance on imports.
- Rising Domestic Demand: The growing middle class and increasing disposable incomes are fueling demand for smartphones, laptops, and other electronic devices.
- Global Supply Chain Shifts: Geopolitical tensions and supply chain disruptions have led to a shift in manufacturing away from traditional hubs, presenting an opportunity for India to attract investments.
The Indian government has initiated many new policies favoring domestic electronics manufacturing by promoting semiconductor manufacturing locally which reduces the dependency of importing semiconductors and supply chain disruption.
What electronics dose India manufacturers?
70% of the electronics manufactured in India is mobile phone that accounts to 44.00%, consumer electronics accounts to 11.0%, IT hardware accounts to 5.0%, electronics components account to 11.0%, Industrial electronics 13.0%, auto electronics accounts to 8.0% and rest is accounted by LET lighting, wearables and hearables, PCBA, and strategic electronic.
Interesting fact is that mobile manufacturing has gone up by 5x from 2015 to 2022. Current trends indicate India may have 1 billion smartphone users by 2026.
More over India is one of the largest consumers of electronics product with rise in disposable income of middle-class people. This massive consumer base with disposable income and rapid urbanization fuels the consumer electronics industry and fueling the growth of electronics manufacturing industry in India.
Also, India has become on of the hub where many global leaders in electronics manufacturing design and service have started setting up their electronics manufacturing plants in India. This indicates the trust in India’s growth in electronics manufacturing Industry.
Challenges and Opportunities in India’s Electronics Manufacturing:
Even Tho India has is attractive for electronics manufacturing industry still the Indian electronics manufacturing industry have not evolved to a complete and matured industry. Since its still in its growth phase there are many challenges in EMS industry in India.
High import dependence for electronic components: Even though the domestic production is supported by the government. India still depends on the import of electronics components from countries like China. Which is a very crucial fact.
Between March 2023 and February 2024, the country imported 130,086 shipments of these crucial components. This represents a 6% increase compared to the previous year. As per source volza https://www.volza.com/p/electronic-component/import/import-in-india/coo-thailand/
Importing electronics can some time be disrupted due to geo political tensions and other issues. Also increases the cost of manufacturing as well.
Lack of skilled workforce in certain segments: Even though India has a large pool of skilled workforce still finding skills for specific roles is still a hectic process.
The Indian electronics manufacturing industry requires a skilled workforce across various domains, including design, engineering, and production.
Finding the specific skills out of a large pool of people seeking employment is not easy.
Complex regulatory environment:
As said before the Indian electronics manufacturing ecosystems is still under growth and not matured yet and the Indian governments regulations are hard to navigate as well. Navigating through these complex regulations can be time consuming.
Opportunities in Electronics manufacturing industry
Government initiatives like PLI scheme: The government of India seeing the future of electronics manufacturing in India introduced Production-Linked Incentive (PLI) scheme. This scheme will help companies with financial incentives from the government to promote electronics manufacturing in country.
This shows the government’s interest in the future and growth of electronics manufacturing industry.
The government is actively working to overcome these challenges by implementing a range of measures.
Rising domestic demand for electronics: India is one of the largest consumers of electronics. The consumer electronics has the most of it demand the rise in disposable income of the middle class is the major reason for that.
Shifting global supply chains: Geopolitical tensions and supply chain disruptions are leading to a shift in global supply chains for electronics. This presents an opportunity for India to attract investments from companies that are looking to diversify their manufacturing base.
Local Components manufacturing: India is set to roll out incentives worth up to 5 billion dollars to local electronics firms to manufacture components for devices ranging from smartphones to laptops, according to government officials.
This has been done to reduce heavy dependence of India on importing electronic components from countries like China and Taiwan. This could sort the supply chain issues raised due to geo-politics.
India: A Rising Powerhouse in Electronics Manufacturing
India is rapidly emerging as a global leader in electronics manufacturing. Driven by favorable government policies, a growing domestic market, and a skilled workforce, the industry is experiencing significant growth. This blog post explored the current landscape of electronics manufacturing in India, highlighting its key trends, the types of electronics manufactured, and the exciting opportunities it presents.
However, challenges remain, such as a reliance on imported components and a complex regulatory environment. The Indian government is actively working to address these challenges through initiatives like the Production-Linked Incentive (PLI) scheme and promoting local component manufacturing.
With its vast potential and ongoing advancements, India is well-positioned to solidify its place as a major electronics manufacturing hub.
Considering Electronics Manufacturing in India?
For a more in-depth analysis of the benefits of establishing an electronics manufacturing base in India, you can explore this informative blog post: Why You Should Consider Electronics Manufacturing in India
By leveraging these strategies, India can solidify its position as a global electronics manufacturing hub and contribute significantly to the country’s economic growth.
Are you a company looking to expand your electronics manufacturing footprint? Consider India – a land of opportunity with a bright future in this dynamic industry.
We Tecno systems India is a European based electronics manufacturing services providing services in India for last 10 years. Our EMS plant in Bangalore provide you with all kinds of services from PCB assembly to distribution for OEMs, Brands and Startups. Start manufacturing in India with us.
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