India has seen a significant surge in electronics production and exports over the past decade. While output has risen dramatically, a key question remains: how much of this growth truly adds domestic value? Experts suggest that the next phase of the "Make in India" initiative must focus on developing local component manufacturing, strengthening engineering capabilities, and reducing reliance on imported inputs to ensure sustainable economic benefits.
The electronics manufacturing process involves multiple intricate stages, from initial product design and component development to final assembly, rigorous testing, and distribution. Although India's electronics sector has expanded rapidly, cultivating a robust domestic component ecosystem, advanced engineering capabilities, and a highly skilled workforce will be crucial for retaining more economic value within the nation's borders.
Official figures highlight the sector's impressive growth. Electronics production in India jumped from ₹1.9 lakh crore in 2014-15 to an estimated ₹13.11 lakh crore by 2025-26. Similarly, exports escalated from ₹38,263 crore to ₹4.24 lakh crore in the same timeframe, demonstrating a clear upward trajectory in output.
However, increased production volume does not automatically equate to greater domestic value addition. The actual value retained within India hinges on the extent to which a product's components, core technology, design, and engineering are developed and manufactured locally, rather than merely assembled from imported parts.
Beyond Assembly: The Push for Deeper Localisation
Ashutosh Gupta, Director of Sales & Marketing at Summercool Home Appliances, emphasized the need for India's manufacturing strategy to evolve beyond simply increasing production capacity. "The initial phase of Make in India primarily focused on building capacity, attracting investments, and facilitating product manufacturing within the country," Gupta told Business Today. "The subsequent opportunity lies in a deeper engagement—moving from capacity building to developing critical components, engineering expertise, and skilled talent that can generate significant value domestically."
Understanding the Value Chain
The entire electronics manufacturing chain, from conceptual design to final distribution, offers various points for value creation. While importing components for local assembly contributes to manufacturing output and employment, the potential for true value generation is maximized when a greater number of these supply chain stages, particularly component fabrication and advanced design, are established within India.
High-value components such as semiconductors, displays, sensors, and intricate electronic controls often constitute a substantial portion of a product's overall cost. Therefore, relying solely on gross production and export figures can be misleading when assessing the true domestic value added to these products.
Developing a Domestic Component Ecosystem
India's immediate challenge involves cultivating a robust domestic supplier network. This ecosystem needs to encompass manufacturers of critical components like motors, electronic controls, specialized plastics, and sheet metal, which are essential for both electronics and consumer durables. Government initiatives like the Electronics Component Manufacturing Scheme (ECMS) are designed to facilitate this shift. Industry data indicates that 38 factories under the ECMS have already commenced operations, with an additional 16 sites actively engaged in construction and machinery installation.
Gupta noted that expanding domestic component manufacturing could offer significant advantages for consumer-durable producers, fostering more integrated supply chains and enhancing both cost-effectiveness and quality. However, he cautioned that localisation efforts must remain commercially viable. "Cost competitiveness, quality, and scalability must advance in tandem," Gupta stated. "The goal is to cultivate Indian suppliers capable of not only substituting imports but also competing effectively in global markets."
The Crucial Role of Technology and Skilled Talent
Beyond merely producing components locally, manufacturers require advanced engineering expertise, cutting-edge production technology, and a highly skilled workforce to ensure consistent, competitive output. "Simply having available manpower won't suffice," Gupta explained. "Companies need individuals proficient in operating new machinery and technologies, adept at quality control systems, and capable of troubleshooting complex production processes."
Cultivating these advanced capabilities could empower India to transition from primarily assembly-based manufacturing to more sophisticated activities, encompassing comprehensive engineering, innovative product development, and original technology creation.
Measuring Future Progress
Having proven its capacity for expanding electronics production and exports, India's future progress should be measured by metrics such as domestic sourcing levels, local component manufacturing capacity, reduced import dependence, and the growth of indigenous engineering capabilities. The aim is not to achieve overnight self-sufficiency in every component, but rather to incrementally boost local value addition while simultaneously establishing globally competitive supply chains. As Gupta succinctly summarized, "The next chapter of Make in India will be defined by how much of what goes into products can increasingly be designed, engineered, manufactured and supported by capabilities built in India."