Before the Breakthrough: When India Relied on Imported Electronics
A decade ago, India was one of the world’s largest consumers of electronics but had limited domestic manufacturing capacity.
High-value products such as smartphones, consumer electronics, and telecom equipment were largely imported, mainly from East Asian manufacturing hubs. This heavy reliance increased the country’s trade deficit and left critical supply chains outside India’s control, even as the digital economy expanded rapidly.
Today, the situation has changed significantly. India is evolving from a major importer of electronics into a growing manufacturing hub. The country now produces and exports smartphones, consumer electronics, and complex assemblies, signaling a clear shift toward becoming a competitive global electronics manufacturing destination.
The Policy Push That Sparked Momentum
The emergence of India as a major center for electronics manufacturing is the result of deliberate, targeted government interventions aimed at attracting global investment, enhancing domestic production capacity, and promoting value addition.
Such programs have been instrumental in turning India from a mostly electronics-importing country to a production base for global brands.
When Incentives Became Investment (PLI Scheme)
The Production Linked Incentive Scheme (PLI Scheme) is probably one of the most influential policies introduced for the electronics industry. The scheme differs from traditional subsidies in that it only benefits manufacturers based on their additional production and sales growth.
The major effects of the scheme are:
- Incentives linked to performance: Firms are granted monetary benefits that mirror their increased manufacturing deliveries.
- Push for increased production: The program acts as an impetus for companies to build more factories and leverage India’s manufacturing advantages.
- International capital attraction: Major original equipment manufacturers and electronic manufacturing services providers saw this as a green light and responded by establishing large-scale manufacturing facilities and increasing their investments.
This outcome-oriented system has played a critical role in boosting India’s electronics production as well as exports.
“Make in India” Finds Its Factory Floor
The Make in India campaign, which was initially aimed at attracting manufacturers through a branding initiative, has now turned into a significant driver for manufacturing growth.
Major milestones of the campaign:
- Creation of industrial corridors and electronics clusters
- Facilitation of regulatory approvals for manufacturers
- Enhancement of logistics, ports, and infrastructure
- Expanded support for domestic manufacturing ecosystems
Thanks to these reforms, India has become an attractive location for electronics manufacturing investors.
The Tariff Strategy That Encouraged Local Value Addition
Along with these measures, India introduced phased manufacturing programs (PMP) as a tool to increase domestic value addition over the years.
Significant results:
- The imposition of higher tariffs on finished imports to encourage local production
- Grant of lower duties on components to support domestic assembly lines
- Provision of incentives to companies for localizing supply chains and manufacturing operations
Due to this policy, the electrical and electronics manufacturing sector in India has moved from importing finished goods to increasing domestic manufacturing and assembling of products within the country
The China+1 Strategy And India’s Timely Entry
Major changes in global supply chains in the last few years have led businesses to change their manufacturing plans.
The China+1 strategy, i.e., when companies set up production outside China as well to reduce risk, has seen very fast growth and led to the emergence of new manufacturing hubs.
A few global situations were the cause of this change in the China+1 strategy:
- Geopolitical tensions: A series of trade disputes between the leading economies has created a lot of uncertainty about concentrating manufacturing only in China.
- Pandemic-driven disruptions: The chain of supply shocks post the COVID-19 pandemic has revealed the weaknesses of highly centralized manufacturing networks.
- Rising manufacturing costs: Increasing labor and operational costs in China have made diversification financially attractive for global manufacturers.
- Supply chain resilience: Companies are actively building multi-country production networks to ensure business continuity.
This created a timely opportunity for India to make a significant move in the global manufacturing space.
The China+1 strategy is expected to be a huge opportunity for India as the country is already quite capable and resourceful, continues to strengthen its infrastructure, and offers competitive incentives for large-scale manufacturing that the country can stand as a credible alternative manufacturing base.
Some of the government programs that are focusing on pushing manufacturing exports and supply diversification support include Make in India and the Production Linked Incentive (PLI) Scheme.
Consequently, India is becoming a preferred destination for those who are looking to expand production beyond China as part of their supply chain diversification and risk mitigation efforts.
Global Brands Are Already Betting on India
India’s rise on the electronics manufacturing global stage is clearly visible by the increasing footprints of several world-class technology giants.
During the last few years, many companies have significantly increased their manufacturing investments in India, thereby strengthening the country’s role in international supply chains.
Samsung, Apple, and Foxconn are good examples of companies that have increased their presence in India in a big way. Apple’s increase in iPhone manufacturing through its local partners has led to India becoming a more profitable export base for the company. Samsung is continuously enlarging its massive manufacturing units for phones and other electronics to cater to both the Indian market and the rest of the world. Expanded its manufacturing presence and investments, Foxconn has also ramped up acquisitions of existing manufacturers and contributed to several global OEM programs.
Similarly, other global brands like Wistron, Pegatron, and Dell Technologies have also ventured into increasing their footprint in India. The investments made by these companies demonstrate the reorientation of global brands to treat India as a major manufacturing destination besides just a huge consumer market.
The Workforce Advantage: Young, Skilled, and Scalable
India’s rise as a worldwide hub for electronics manufacturing is driven by its skilled workforce. The workforce-related factors that put India ahead include:
- Demographic Dividend– The country is blessed with one of the youngest populations in the world, thus offering a huge workforce of young talents ready to be trained and employed in manufacturing.
- Engineering Talent Pool– Every year, a large number of graduates in the fields of electronics, mechanical, and software engineering create a continuous supply of competent professionals.
- IT + Hardware Synergy– The existence of one of the most robust IT sectors in the world in India and its hardware manufacturing sector makes it possible for embedded systems, IoT devices, and smart electronics to seamlessly integrate hardware and software.
- Scalability– The availability of a flexible workforce means that manufacturers can increase their production levels without delay when there are fluctuations in global demand.
- Cost Competitiveness– Labor costs are still considerably below those in the majority of other competing nations, which not only increases profitability but also maintains the quality of the skills.
The mix of these features makes India a smart, scalable, and economical spot for manufacturing in the eyes of global OEMs who are in search of an efficient and innovation-driven electronics production.
From Assembly to High-Value Manufacturing
A common perception persists that India’s electronics industry is limited to low-cost assembly. While assembly was the initial focus, the sector has rapidly evolved into high-value manufacturing, demonstrating capabilities far beyond mere device assembly.
Today, Indian manufacturers are proficient in printed circuit board (PCB) assembly, system integration, and complex module fabrication. Complementing this is a growing strength in embedded systems design, enabling the development of intelligent devices that combine hardware and software seamlessly.
India is also making strides in semiconductor packaging and testing, bridging critical gaps in the global electronics supply chain. Investments in R&D centers, both by global OEMs and domestic EMS companies, have fostered innovation in product design, prototyping, and advanced electronics engineering.
This shift is not just technological but strategic: it positions India as a reliable hub for end-to-end electronics manufacturing, capable of supporting high-value production for global brands.
The narrative has moved decisively from “assembly-only” to design-led, export-ready manufacturing, signaling India’s emergence as a critical player in the global electronics ecosystem.
The Rise of Indian EMS Companies
Indian Electronics Manufacturing Services (EMS) companies are quickly changing their role from mere contract assemblers to becoming the strategic partners of global Original Equipment Manufacturers (OEMs).
Taking advantage of the country’s expanding industrial ecosystem, these local players are evolving and now deliver end-to-end design-to-delivery solutions, including product conceptualization, PCB design, prototyping, assembly, testing, and certification.
Through the combination of engineering knowledge and manufacturing prowess, Indian EMS companies have become the backbones of complex electronics products like consumer devices, telecom equipment, and industrial electronics.
Compliance and quality have become key differentiators through which the companies differentiate themselves, many of which comply with international standards such as ISO, IPC, and RoHS, thereby ensuring products are export-ready and fulfilling tight global regulations.
Besides, these EMS companies are widely extending their services to cover entire supply chains, right from component sourcing, logistics, and even after-sales service, thus giving the OEMs an opportunity to lower their operational risks but still keep their flexibility and quick time-to-market.
This shifting is part of a bigger picture: India is no longer seen just as the world’s assembly line. Indian EMS companies have become essential components of innovation, able to manufacture high-value electronics and, at the same time, serve the global electronics industry with reliable, scalable, and compliant manufacturing solutions.
The Gaps That Still Need Closing
Despite the significant progress made by India’s electronics manufacturing ecosystem, some major gaps still exist, and they need to be addressed to sustain growth.
Both local players and global investors who wish to use India as a long-term manufacturing base must be aware of these issues.
- Component Import Dependence– The majority of the high-end components, such as semiconductors and advanced modules, are still being imported, which means a lack of complete control over production and costs.
- Semiconductor Ecosystem Gap– Even though there are policy measures in place, India’s semiconductor manufacturing and packaging capabilities are only at the initial stage when compared to world leaders.
- Supply Chain Depth– There are only a few suppliers specialized in raw materials and precision components, which are critical, and that is a bottleneck for the growth of advanced manufacturing.
- Skill Gaps in Niche Electronics– Fields like high-frequency design, embedded systems, and semiconductor R&D need not only a larger talent pool but also advanced training programs.
It will be crucial for India to close these gaps over the next five years if it aims to shift the electronics manufacturing industry from being just an assembly-centric one to a high-value, innovation-led one.
Why the Next 5 Years Matter More Than the Last 10
India has achieved quite a bit in electronics manufacturing in the last ten years. But what the next five years will bring can hardly be compared to the achievements of the last decade.
The National Semiconductor Mission is the keystone of this major change. It aims at making India a leading player in the semiconductor sector, lessening the country’s dependency on imports, and inviting the best chip fabrication investments. Besides that, raising export ambitions is making manufacturers expand their operations for the world market, not merely focused on assembly, but moving towards high-value products.
The emergence of a local component ecosystem, for instance, PCBs to specialized modules, will be crucial in supply chain resilience and innovation.
At the same time, India is stepping up the ladder by shifting from manufacturing low-margin, volume-driven electronics to producing high-value, technologically advanced products, such as embedded systems, advanced consumer electronics, and industrial solutions.
This would be a phase that globally and domestically situated OEMs would also see as a change from ad-hoc manufacturing to building strategic, long-term capabilities, and this would set India up as a major, high-value electronics hub on the world stage.
What This Shift Means for Global OEMs and Brands
India’s rise as a global electronics manufacturing hub offers OEMs and brands a strategic advantage. Companies can achieve faster supply chain diversification, tap into cost-competitive production, and leverage policy-backed incentives for sustainable growth.
Beyond operational efficiency, India provides a long-term, scalable manufacturing base, ideal for global expansion and resilience. For brands seeking not just assembly but end-to-end design, compliance, and delivery solutions, partnering with an experienced local EMS player is critical.
Leverage Syrma SGS’s expertise today to build a resilient, future-ready manufacturing base.
Disclaimer: Images used in this Blog are AI generated
