The latest Rubix Data Sciences titled ‘Rubix Industry Insights – Electronics Manufacturing’ highlights that India aims to achieve an electronics production target of $500 billion by 2030. The government’s various policies for the electronics industry are driving this growth, with an aim to become a global leader by 2030. The report also highlights opportunities driven by strategic government initiatives, robust domestic demand, and the global shift in supply chains. It also highlights the challenges that must be mitigated to sustain this momentum.
The government’s initiatives like the Production Linked Incentives (PLI) scheme have attracted investments of more than $17 billion. This is driving growth across sectors including mobile phones, semiconductors and consumer electronics. The report further highlights that India’s semiconductor market is projected to reach $109 billion by 2030, spurred by projects like Tata Electronics’ fabrication plants and Micron Technology’s $2.75 billion ATMP facility. These initiatives aim to localise production and reduce the reliance on imports.
Further, India’s mobile phone exports grew by over 40% in FY2024 to $15.6 billion. Domestic value addition in mobile manufacturing increased from 6% in 2017 to 16% in 2023, with aspirations to reach 50% by 2030. The reports talks about the global players like Apple and Samsung who are capitalizing on India’s growing manufacturing ecosystem. Tamil Nadu alone has seen electronics exports grow exponentially, from $1.66 billion in FY2021 to $9.56 billion in FY2024.
However, India continues to rely on imports for high-value components like semiconductors, Printed Circuit Board Assemblies (PCBAs), and chipsets, despite the growing domestic reliance. Electronics imports from China alone exceeded USD 12 billion in FY2024. The report further highlighted that India’s average electronics tariff rate of 7.5% places the country at a 5% to 6% cost disadvantage in assembly and a 4% to 5% disadvantage in component manufacturing compared to competitors like Vietnam and Malaysia. This contributes to a 10% to 14% cost disability in assembly and 14% to 18% in component manufacturing.
Another concerning factor is India’s investment in R&D that is just 0.64% of the country’s GDP compared to 2.41% in China and 5.71% in Israel. This limits innovation in critical sectors such as semiconductors and Internet of Things (IoT) devices. On the other hand, while India has seen success in assembly operations, component manufacturing remains nascent. High-complexity components like silicon chips are still largely imported, accounting for 64% of the demand in the automotive electronics sector alone.
The current state of India’s manufacturing sector is a dual narrative of opportunity and challenge. From mobile devices to semiconductor manufacturing, businesses have tremendous opportunities to grow. However, addressing structural issues such as tariff complexity, R&D gaps, and infrastructure development is crucial to unlocking the sector’s full potential.
“The electronics industry in India represents a unique blend of opportunities and challenges. Companies that act swiftly to invest in innovation and value addition will be at the forefront of this transformation,” said Mohan Ramaswamy, co-founder & CEO of Rubix Data Sciences. “This report is a must-read for stakeholders aiming to play a significant role in India’s electronics revolution.”
