The electronics industry in India has been experiencing robust growth over the last decade, driven by a booming consumer base, favourable government policies, and increasing investments from global and domestic players. As the country accelerates its digital transformation journey, the electronics market plays a pivotal role in establishing India as a global manufacturing hub.
Read on to learn more about how India’s electronics industry is leveraging opportunities and tackling the emerging challenges ahead.
Current Market Trends
The electronics manufacturing industry is set to be a key pillar of growth for India, with projections indicating it could reach a valuation of $520 billion by 2025. In FY24, exports of electronic products amounted to $29.11 billion, up from $23.57 billion in FY23.
The electronics design segment is witnessing impressive annual growth, with an average CAGR of 20.1% between FY19 and FY25. With steadfast government support and a robust manufacturing base, electronic goods exports are anticipated to soar to $120 billion by 2026, up from $15 billion in 2021-22.
Between FY19 and FY25, the electronics market witnessed a staggering growth of 151%.
PM Modi’s Vision for Electronics Manufacturing
During his address at Semicon India 2024, organised by the India Semiconductor Mission, PM Narendra Modi articulated his vision for making India’s electronics sector worth $500 billion by 2030. Industry stakeholders are optimistic about this goal; however, they believe a clear roadmap and appropriate policy support from the government are crucial for its realisation.
Emerging Trends in India’s Electronics Market
Semiconductor Manufacturing: India’s entry into semiconductor manufacturing represents one of the most significant developments in the electronics industry. With global chip shortages affecting various sectors, India aims to establish itself as a semiconductor manufacturing hub, reducing dependence on imports and securing its electronics supply chain.
5G Technology: The rollout of 5G technology is expected to create substantial demand for 5G-enabled devices, ranging from smartphones to IoT applications. According to a report by Counterpoint Research, India’s 5G smartphone shipments have surged by 60% in the first half of 2024 compared to the same period in 2023.
Electric Vehicles (EVs): India’s push towards electric vehicles (EVs) is also stimulating the electronics market, particularly in battery technology, sensors, and autonomous driving systems. Companies like Tata Motors and Ola Electric are heavily investing in EV production, creating new demand for high-quality electronic components.
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With active government support, electronics manufacturing companies are optimistic about future prospects. All major players are ramping up their capital expenditures to capitalise on rising domestic demand and lucrative export opportunities.
What’s Next?
The electronics industry is a vital pillar of India’s economic growth, contributing 3.4% to the GDP. The NITI Aayog has released a report outlining the opportunities, challenges, and recommendations for the government to position India as a global electronics manufacturing hub. The substantial growth in the electronics sector is primarily fueled by mobile production, which constitutes 43% of total electronics output. India fulfils 99% of its domestic demand through local production.
Despite government initiatives like Make in India, Aatmanirbhar Bharat Abhiyan, and Production Linked Incentives, which have enhanced infrastructure and improved the ease of doing business, India currently accounts for only 4% of the global market, focusing mainly on assembly. The global electronics market, valued at $4.3 trillion, is dominated by countries like China, Taiwan, the USA, South Korea, and Japan. To secure a significant role in this space, India must invest heavily in R&D, localise high-tech products, and forge strategic partnerships with major players.
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