Expected Growth in India’s Electronics Manufacturing Sector

Electronics have become staples in society, meeting the needs of developing economies globally. In this accelerated-digital age, India also sees significant growth in its electronics manufacturing footprint as it rapidly evolves from a nascent-state electronics sector in the 1960s. Having begun producing basic components back in the 1960s, the country is now expected to increase its market value almost seven-fold by the end of 2026. 

This is a result of major growth in a number of sectors and the entry of new industries into the country, making it a rapid scaler in relations to its neighbors. Currently, India’s digital economy is valued at US$155bn with anticipated growth over US$1tn within the next few years. 

This marks two things. Firstly, India’s competency in manufacturing digital products in 2024, secondly, the reduced barriers to electronics and smart-technology manufacturing. As more advanced digital systems arise with the integration of artificial intelligence (AI) this becomes a high priority for product designers—both software and hardware play their part in enabling this evolution in India. 

Overview of India’s electronics manufacturing growth

Apart from its astonishing growth projection, India is fast-becoming a hub for electronics manufacturing. The country sees an increased number of outfits for producing mobiles and other consumer goods, while on the flip side, venturing into electrification technologies to decarbonise the nation.

Based on data from 2023, electronics production in India was value at US$101bn, and the general spread of products are roughly as follows:

• 43% mobile phones 
• 12% consumer electronics 
• 12% industrial electronics
• 11% electronics components
• 8% auto electronics 
• The remaining 14% shared across IT hardware, strategic electronics, PCBA (0.7%), wearables, and LED lighting

As a result, around US$15.46bn worth of electronics was exported from the country from April to October 2023. Also a producer of PCBs, these tend to be supplied to the US, China, and Hungary. 

Urbanization of India Generates a Larger Electronics Consumer Base

Known for its size and scale, in 2022, around 64% of India was considered rural. This is representative of the country's historic disparity and the varying wealth across areas of the country leaves a lot of room for the economy to grow. 

As with all countries these days, this led authorities to invest in ways to connect cities and bring more of the population into an evolving Internet of Things (IoT). 

Digital Technologies Driving Growth of India’s Electronics Sector

Electronics manufacturers now serve a myriad of industry and applications; areas in which India has seen immense growth in recent years. Semiconductors and other PCB components will soon make up the critical fabric of society, required in numerous products and smart solutions. 

With this comes the attention of some major electronics firms with stakes in the country’s growing production of PCB.

Scaling more advanced technology and smart systems

As India scales its use of smart technologies and digital products, the inevitable increases the demand for parts that power and manage data within electronics. India seems to be attractive for large corporations like Panasonic, Google, Micron, Apple, and Intel with products as they look to expand their manufacturing footprints in this emerging market. 

The number of smartphones in use across the country is set to reach one billion by 2026, meaning that demand won’t falter any time soon. With this opportunity comes interest from major businesses as they expand into India. 

Sustainable mobility demands hardware for digital

The latest trend sweeping the globe, let alone India, is the immense shift towards sustainable mobility. This, in the form of electric vehicle (EV) adoption, is where we see significant growth in digitally driven vehicles and the potential for AI to drive cars in the near future. 

In 2023, almost 1.4 million EVs were sold, including two-wheelers, three-wheelers, passenger and light vehicles, and buses. All of these require certain components, including the high-demand semiconductor for the conversion of electrical energy from platform batteries to the motors that drive the vehicles.

Companies like Foxconn—known for its EV manufacturing—as well as the likes of TDK Corporation, Tesla, and the Vietnamese carmaker VinFast, all face the wrath of component shortages as they look to grow their businesses.

5G Rollout Drives India’s Growing Electronics Sector

While there was significant disparity between cities in India as a result of the 5G network launch in 2022, the country has significantly improved mobile data speeds, which has been instrumental in growing its economy over the past year. The country’s ranking in the overall Speedtest Global Index shows its digital connectivity is improving dramatically. This, and the reduction in costs of components, led to a boom in electronics production and new ventures into smart solutions that will inevitably expand the nation’s digital ecosystem. 

Initiatives Supporting India’s Electronics Boom

There’s a variety of initiatives and other trends that impact India’s ability to grow at such a rapid rate. The country is supported by various schemes that give financial incentives to sales growth in the sector. These initiatives include:

Production Linked Incentive (PLI) Schemes for Large Scale Electronics Manufacturing and IT Hardware: The objective of this is to boost the manufacturing of domestic digital products, such as mobile phones and other consumers goods, also incorporating Assembly, Testing, Marking, and Packaging (ATMP) units. Through this scheme, India’s government offers 4% to 6% financial incentives on the incremental sale of electronics manufactured in India-based facilities. Under this initiative, there is also a scheme for IT hardware manufacturing, which applies a 1% to 4% incentive on net incremental sales. 

Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS): A further initiative by the Government that is meant to strengthen the overall manufacturing ecosystem across India. This is driven by the overarching vision of authorities to make India a hub for electronics system design and manufacturing (ESDM). The financial incentive is 25% for manufacturing goods that support the electronics supply chain, including new projects and extensions to existing ones—eligible businesses include technology manufacturers, semiconductor producers, and providers of ATMP units. 

Outlook For the Future of Indian PCB Production

India’s PCB market alone was valued at nearly US$4.52bn in 2023, and will continue to grow as it plays a pivotal role in the country’s electronics output for both national and international buyers. However, this is likely to majority-serve the Indian markets as the country operates a fraction of the leading global makers of PCBs. 

China, for example, values its PCB market at roughly US$46bn by 2025—ten-fold India’s current output in less than two years. As a result, organizations will likely rely on China-based supplies during or, for small to medium order quantities can leverage the Octopart.com PCB search engine with millions of available components from thousands of parts suppliers. 

The overall electronics market is one to watch as the government invests heavily in initiatives to bring the country forward into the digital era—from connected mobile devices to automotive evolutions, components will be critical in enabling the latest technologies.