India’s electronics manufacturing: Entering a more consequential phase

Highlights

• India’s electronics manufacturing ecosystem has now transitioned from a policy experiment into a structurally investable opportunity. What began as incentive-led assembly has steadily evolved into a deeper, more integrated manufacturing base.
• The recent 75% increase in funding for the Electronics Components Manufacturing Scheme (ECMS) reinforces this shift. Spread over six years, the scheme is designed to catalyze investments in component manufacturing, raise domestic value addition, and integrate Indian firms more meaningfully into global value chains.
• EMS players are now moving upstream into component-level manufacturing—bare PCBs, camera and display modules, connectors, capacitors and other critical inputs. This shift enhances supply chain reliability, shortens inventory cycles, and mitigates exposure to global disruptions.
• India’s ambition to achieve US$500 billion in electronics production by 2030 is achievable—only if this consequential phase transition from volume-driven assembly to value-driven manufacturing continues with discipline and execution. 

India’s electronics manufacturing ecosystem has now transitioned from a policy experiment into a structurally investable opportunity. What began as incentive-led assembly has steadily evolved into a deeper, more integrated manufacturing base. Sustained government support, global supply chain diversification beyond China, rising domestic consumption, and a significant import substitution opportunity are converging to create durable momentum. In many ways, the trajectory resembles the early expansion phase of China’s EMS industry. The mobile phone segment has already demonstrated that India can serve as a credible global production hub at scale.

Building a Resilient Component Ecosystem

The recent 75% increase in funding for the Electronics Components Manufacturing Scheme (ECMS) reinforces this shift. Spread over six years, the scheme is designed to catalyze investments in component manufacturing, raise domestic value addition, and integrate Indian firms more meaningfully into global value chains. The Central and State gov’t incentive structures—combining turnover-linked, capex-linked, and hybrid incentives—targets both scale and depth. Complementary policy measures, including safe harbor provisions for non-resident warehousing to enable just-in-time logistics, and continued customs exemptions for select components, further strengthen the economics of domestic production. Together, these measures aim to reduce import dependence while building a resilient component ecosystem.

Evolution in the Bare PCB Ecosystem

India has largely succeeded in localizing end-product assembly. The next phase is more consequential. EMS players are now moving upstream into component-level manufacturing—bare PCBs, camera and display modules, connectors, capacitors and other critical inputs. This shift enhances supply chain reliability, shortens inventory cycles, and mitigates exposure to global disruptions. More importantly, it improves structural value capture.

Nowhere is this evolution more visible than in the bare PCB ecosystem. Initial efforts focused on local fabrication. The ambition has since expanded to copper-clad laminate (CCL), the core substrate that accounts for roughly half the bill of materials. Control over CCL signals intent: secure raw material supply, reduce external dependence, and capture incremental margins. It marks a decisive step toward end-to-end domestic capability.

The Scale of Commitment

Recent capital expenditure announcements underscore the scale of commitment. Kaynes Technology has outlined approximately ₹1,400 crore toward PCB manufacturing and an additional ₹1,700 crore for a dedicated CCL facility. Syrma SGS has committed nearly ₹1,600 crore for an integrated PCB and CCL plant in Andhra Pradesh. Amber Enterprises has announced a ₹5,700 crore expansion in multi-layer and HDI PCBs, alongside plans to enter CCL production. Wipro’s infrastructure arm has earmarked around ₹500 crore for CCL investments. Collectively, these commitments meaningfully expand domestic value addition and reduce reliance on imports.

Moving From Assembly Scale to Engineering Depth

Near-term margins remain sensitive to commodity inputs such as copper and gold. However, OEM contracts typically provide cost pass-through mechanisms, albeit with a lag of three to six months, offering structural protection to profitability. With the current capex pipeline, the Indian PCB industry could scale toward an estimated US$4 billion in domestic output over the next five years. 

As the ecosystem matures, the emphasis must shift from assembly scale to engineering depth. Sustainable competitiveness will depend on investments in process capability, yield optimisation, quality systems, and high-complexity manufacturing. India’s ambition to achieve US$500 billion in electronics production by 2030 is achievable—only if this consequential phase transition from volume-driven assembly to value-driven manufacturing continues with discipline and execution.