Advantage India
Robust
Demand
*India has strong design and R&D capabilities in auto electronics and industrial economics. India is the second-largest manufacturer of mobile phones in the world and will be the fifth-largest consumer of electronic products by FY26.
*By December 2025, Apple exported more than Rs. 4.43 lakh crore (US$ 50 billion) worth of iPhones from India, marking a significant milestone in the country’s electronics manufacturing growth.
Competitive
Advantage
*In January 2026, while announcing the ECMS third tranche approvals, Union IT Minister Ashwini Vaishnaw termed 2026 a landmark year for India’s semiconductor industry, stating that four semiconductor units will begin commercial production..
*AI is expected to add US$ 967 billion to Indian economy by 2035 and US$ 450-500 billion to India’s GDP by 2025.
Policy
Support
*The production-linked incentive (PLI) schemes will provide companies opportunities to establish manufacturing plants in India.
*As of January 2026, India has approved 10 projects under the India Semiconductor Mission (ISM), with a cumulative investment of Rs. 1.60 trillion (US$ 18.1 billion), under the flagship outlay of Rs. 76,000 crore (US$ 8.6 billion).
Increasing
Investments
*As of December 2025, the Large-Scale Electronics Manufacturing (LSEM) scheme has attracted investments of Rs. 15,172 crore (US$ 1.71 billion) and generated 1,71,448 additional jobs.
*Tata Consultancy Services (TCS) is partnering with Tata Electronics Pvt Ltd to support India's goal of producing its first domestically manufactured chips by FY26.
Introduction
The Indian electronics system design and manufacturing (ESDM) sector is one of the fastest growing sectors in the economy and is witnessing a strong expansion in the country. The ESDM sector was projected to reach approximately US$ 220 billion (Rs. 18,26,000 crore) by FY25, growing at a 16.1% CAGR between 2019 and 2025. The ESDM market in India is well known internationally for its potential for consumption and has experienced constant growth. Looking ahead, the industry is expected to expand at a CAGR of 20–25% over the next five years, with the market set to double and touch Rs. 7,00,000–8,00,000 crore (US$ 79.5–90.9 billion) by 2030.
Indian manufacturers are attracting the attention of multinational corporations due to shifting global landscapes in electronics design and manufacturing capabilities, as well as cost structures. Companies from all over the world are striving to develop local capacities in India not only to serve the domestic market but also to cater to international markets. The cumulative FDI equity inflow in the electronics industry reached Rs. 64,079 crore (US$ 7.22 billion) during the period April 2000 to June 2025. Notably, India surpassed China as the leading smartphone exporter to the United States in Q2 FY26, validating the "China+1" strategy being adopted by multinational OEMs.
The Electronics System Design & Manufacturing (ESDM) industry includes electronic hardware products and components relating to information technology (IT), office automation, telecom, consumer electronics, aviation, aerospace, defence, solar photovoltaic, nano electronics and medical electronics. The industry also includes design-related activities such as product designing, chip designing, Very Large-Scale Integration (VLSI), board designing and embedded systems. The electronics design segment alone accounts for 22% of the ESDM market and is growing at a rapid pace of 20.1%, anticipated to expand to 27% of the market by 2025. According to the India Electronics & Semiconductor Association (IESA), more than 90% of semiconductor companies globally have their R&D centres in India, generating approximately US$ 2.5 billion in revenue and 6 lakh jobs.
India witnessed a substantial spike in demand for electronic products in the last few years; this is mainly attributed to India's position as second-largest mobile phone manufacturer worldwide and surge in internet penetration rate. The smartphone segment has emerged as the backbone of India's ESDM industry, contributing 62% of the overall market in FY25, and growing at a robust CAGR of 28% between FY20 and FY25. The number of smartphone manufacturing units has expanded from just two in 2014 to over 300 in 2024, attracting significant global and domestic investments. The Government of India attributes high priority to electronics hardware manufacturing, as it is one of the crucial pillars of Make in India, Digital India, and Start-up India programs. The total budgetary allocation for the Ministry of Electronics and Information Technology (MeitY) in Union Budget FY26 stood at Rs. 26,026 crore (US$ 3.08 billion), reflecting an 18.64% increase over FY25.
The Electronics System Design & Manufacturing (ESDM) sector plays a vital role in the government’s goal of generating US$ 1 trillion of economic value from the digital economy by 2025. With various government initiatives aiming to boost domestic manufacturing, India has already started witnessing initial movement with increased production and assembly activities across products such as mobile phones and other consumer electronics.
Market Size
The Union Budget 2026–27 announced an increased outlay of Rs. 40,000 crore (US$ 4.5 billion) for the Electronics Components Manufacturing Scheme (ECMS), signalling a strong policy push to deepen domestic manufacturing capacity. Additionally, Basic Customs Duty exemptions on key inputs for microwave ovens came into effect from February 2, 2026.
The Union Budget 2026–27 marked a significant step with the announcement of India Semiconductor Mission (ISM) 2.0, with a provision of Rs. 1,000 crore (US$ 0.11 billion) for FY 2026–27. The initiative focuses on developing domestic capabilities in semiconductor equipment and materials, advancing full-stack Indian semiconductor intellectual property, and strengthening India’s position in global supply chains.
The IESA Technovation Awards, one of the most prestigious recognitions in India’s ESDM and semiconductor industry, were held at the IESA Vision Summit 2026 in
Bengaluru on February 25–26, 2026. The summit, themed “Design to Manufacturing: Synergy of Product, Production and Skill,” underscored India’s growing ambition to emerge as a Product Nation, with support from leading industry players such as Applied Materials and Infineon Technologies.
India is rapidly emerging as one of the largest consumer electronics markets in the Asia-Pacific region, supported by strong domestic demand and a rich talent base in electronic chip design and embedded software. The top product categories driving growth in the Electronics System Design and Manufacturing (ESDM) sector include IT/OA, with the highest CAGR at 54%, followed by industrial electronics at 38% and automotive electronics at 10%.
To meet rising demand, India’s electronics industry is targeting a manufacturing output of Rs. 43,10,000 crore (US$ 500 billion) by 2030, which will require a fivefold increase in production capacity and is expected to generate 12 million jobs by 2027. Exports are also showing robust momentum, with electronic goods exports reaching US$ 38.56 billion in FY25, up 20.4% year-on-year. Mobile phones, IT hardware (laptops and tablets), consumer electronics (TV and audio), industrial electronics and auto electronics remain the leading export categories.
The government has set an ambitious target of achieving US$ 300 billion in electronics manufacturing and US$ 120 billion in exports by FY26. To achieve this, it has introduced major initiatives such as Digital India and Make in India, along with supportive policies including a favourable FDI framework for electronics manufacturing, which has made it easier to establish production facilities in the country.
As the second-fastest digitizing economy among the world’s 17 leading economies, India is positioning electronics goods to become one of its top two to three export categories by 2026, underscoring the sector’s critical role in the nation’s economic transformation.
Investments/ Developments
On October 16, 2025, global technology firms LG Electronics and Samsung Electronics announced major R&D efforts in India, leveraging domestic engineering talent in semiconductor design, system-on-chip and AI-enabled technologies. The move highlights India’s transition from cost arbitrage to high-end capability, supported by government schemes such as the Semicon India Programme, Design Linked Incentive (DLI) Scheme and Chips to Startups (C2S) Scheme.
On July 17, 2025, Tata Electronics and German firm Robert Bosch GmbH signed a Memorandum of Understanding to collaborate on advanced chip packaging and semiconductor manufacturing at Tata’s new assembly facility in Assam and a foundry in Gujarat. They will also explore local electronic manufacturing services, especially for vehicle electronics.
On June 23, 2025, India’s central government approved Micron Semiconductor’s establishment of a Special Economic Zone in Sanand, Gujarat, covering 37.64 hectares with an investment of Rs. 13,000 crore (US$ 1.51 billion), aimed at boosting semiconductor and electronics manufacturing.
By July 2025, Renesas Electronics, in collaboration with CG Power and Stars Microelectronics, is set to complete its pilot Outsourced Semiconductor Assembly and Test facility in Sanand, Gujarat, with the first chip batch expected by mid-2026 and full production by October 2027, backed by a US$ 222 million investment.
On May 14, 2025, the Indian Union Cabinet approved the HCL-Foxconn joint venture to build a semiconductor plant near Jewar Airport, Uttar Pradesh, with a Rs. 3,706 crore (US$ 433.6 million) investment to produce display driver chips, targeting operational status by 2027.
On March 18, 2025, Malaysia’s Deputy Minister of Investment, Trade, and Industry, Mr. Liew Chin Tong, expressed interest in deeper collaboration with India’s semiconductor sector, highlighting areas like equipment, assembly, and testing during his visit to India.
Reliance Industries is set to build the world’s largest data center in Jamnagar, Gujarat, marking a major step in its entry into India's artificial intelligence (AI) sector. The company has procured AI semiconductors from Nvidia to power this project following a collaboration announcement at October 2024 Nvidia AI Summit.
Apple is engaged in discussions with Bharat Forge to establish a partnership, potentially designating the company as a supplier for the manufacturing of components such as mechanical parts.
FollowG has introduced an AI-powered application for the Open Network for Digital Commerce (ONDC), designed to assist small and medium-sized electronics retailers by facilitating connections with buyers across the country.
Investment of Rs. 8,803 crore (US$ 1.06 billion) has been made under the scheme for promotion of manufacturing of electronic components and semiconductors.
The Ministry of Electronics and Information Technology has supported over 3,600 tech startups with a total fund disbursement of Rs. 212 crore (US$ 25.5 million).
India has made substantial cuts to import duties on mobile phones to enhance exports. In the last financial year, mobile phone exports reached Rs 1.2 lakh crore (US$ 14.4 billion), and this upward trend is expected to persist.
India emerged as the second-largest manufacturer of mobile phones in the world, with a production value of mobile devices reaching US$ 49.16 billion in 2024.
Prime Minister Mr. Narendra Modi participated in the event named India's Techade: Chips for Viksit Bharat and laid the foundation stone for three semiconductor projects valued at Rs. 1.25 lakh crore (US$ 14.97 billion) on 13th March 2024.
Major Government initiatives such as ‘Digital India’, ‘Make in India’ and supportive policies including a favourable FDI Policy for electronics manufacturing have simplified the process of setting up manufacturing units in India.
Union Budget 2023-24 has allocated Rs. 16,549 crore (US$ 2 billion) for the Ministry of Electronics and Information Technology, which is nearly 40% higher on year. The budget for FY23 had allocated Rs. 14,300 crore (US$ 1.73 billion) for the IT ministry.
The Indian startup ecosystem is experiencing a surge over the years, due to rapid technological advancements, increasing internet penetration, growing digital infrastructure, rising startup culture, government initiatives like Digital India, Make in India, and Startup India, as well as a large pool of skilled workforce.
India has witnessed an exceptional surge in the creation and funding of startups as the country has solidified its position as a major global centre for innovation and businesses. However, securing adequate funding remains a significant task for startups, often leading to survival challenges.
STPI Signs MoUs to strengthen tech startup ecosystem: AIC STPINEXT Initiatives (STPINEXT), a special purpose vehicle of Software Technology Parks of India (STPI), an organisation under the Ministry of Electronics and Information Technology (MeitY) has signed two memorandums of understanding (MoUs), one with HDFC Bank, and another with Excelpoint Systems India Pvt. Ltd., a niche technology player for fostering entrepreneurship and nurturing tech startups in the country. These partners would play a critical role in supporting and handholding the startups in the growth journey through technical guidance & assistance, mentoring, pitching to investors, funding support, and market connect & access etc.
Some of the investments/ developments in the Electronics System Design & Manufacturing (ESDM) sector in the recent past are as follows:
- The cumulative FDI equity inflow in the Electronics industry is Rs. 64,079 crore (US$ 7.22 billion) during the period April 2000-June 2025.
- The Quick Estimates of IIP stands at 156.6 in May 2025 against 154.7 in May 2024. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of May 2025 stand at 136.3, 154.3 and 216.0 respectively.
- The total budgetary allocation for the MeitY in the Union Budget FY26 stood at Rs. 26,026 crore (US$ 3.08 billion), reflecting an 18.64% increase over the budget estimates of FY25.
- The Ministry of Defence has finalized a contract with Bharat Electronics Limited, Bengaluru, for the procurement of Electronic Warfare Suites, aircraft modification kits, and their installation on Mi-17 V5 helicopters for the Indian Air Force, amounting to a total cost of Rs. 2,385 crore (US$ 282.1 million).
- On the 32nd foundation day of the department of Nuclear Magnetic Resonance (NMR) at AIIMS, New Delhi, the Society for Applied Microwave Electronics Engineering & Research (SAMEER) and AIIMS signed a MoU to foster collaborative research on medical devices. This agreement will facilitate joint efforts to develop high-field and low-field Magnetic Resonance Imaging (MRI) and NMR systems, while also promoting research in radio frequency, microwave systems, and related fields for medical applications.
- Competition Commission of India has approved the acquisition of certain shareholding of Pegatron Technology India Pvt. Ltd. (Pegatron India) by Tata Electronics Pvt. Ltd. (TEPL) and the transfer of TEL Components Pvt. Ltd. (TEL)’s business undertaking to Pegatron India.
- As of November 2023, applications of 27 IT hardware mobile phones manufacturers have been approved for Production Linked Incentive scheme (PLI).
- In March 2024, the Cabinet approved a massive Rs. 1.26 trillion (US$ 15.2 billion) investment in three semiconductor plants, signifying India's technological progress.
- India and Taiwan plan a US$ 7.5 billion chip plant deal, potentially boosting India’s semiconductor manufacturing with anticipated tariff reductions on components.
- Production-linked scheme (PLI) for large-scale electronics manufacturing (including mobiles) has seen investments worth Rs. 6,887 crore (US$ 833 million) (till June 2023), already surpassing the target for FY24 which was Rs. 5,488 crore (US$ 664.4 million).
- In July 2023, electronics maker Elista announced that it would invest Rs. 100 crore (US$ 12.1 million) in Andhra Pradesh to set up a manufacturing unit for Smart LED TVs, smartwatches, audio speakers, and large appliances.
- US CHIP design major Advanced Micro Devices (AMD) will invest up to US$ 400 million in India over the next five years and will set up its biggest design facility in the country.
- India's electronics sector is set to harness US$ 7 billion untapped revenue by 2035 via circular business model and policy pathways, industry stakeholders said. Current commitments and targets set the projected market size for these circular models at US$ 13 billion in 2035.
- India has overtaken China as the second-largest manufacturer of mobile devices in the world, according to a report released by the international research firm Counterpoint in August. The ‘Make in India’ initiative's mobile phone shipments from India exceeded 2 billion cumulative units and an annual growth rate of 23% was recorded.
- According to a report 'India Monthly Wearable Device Tracker' by International Data Corporation (IDC), "hundreds" of" smartwatch model launches in the first half of the calendar year 2023 contributed to India's wearable market's growth of 53.3% year-over-year (YoY). The companies shipped 57.8 million units of wearables like smartwatches, earwear, and eyeglasses to the market in the first half of CY23.
- The Ministry of Electronics and IT (MeitY) announced the exchange of signing of a Memorandum of Understanding (MoU) between the Centre for Nano Science and Engineering (CeNSE) at the Indian Institute of Science (IISc), Bengaluru and Lam Research India at the SemiconIndia in Gandhinagar.
- In November 2023, Mr. Ashwini Vaishnaw, Union Minister of Communications & IT said that 99% of mobiles used in India are made in India.
- Industrial robot accessories company Robot System Products (RSP) has announced plans to set up a subsidiary in India. The Indian entity Scandinavian Robot Systems India Private Limited has been registered in Chennai and will supply a range of industrial robot accessories to Indian customers.
- India Semiconductor Mission organized a three-day SemiconIndia 2023 Conference in July 2023 with the theme ‘Catalysing India’s Semiconductor Ecosystem’ in Gandhinagar, Gujarat. SemiconIndia 2023 witnessed the participation of industry leaders from major global companies such as Micron Technology, Applied Materials, Foxconn, Cadence and AMD, and the industry association, SEMI.
- India and Japan on July 20, 2023, signed an agreement for semiconductor design, manufacturing, equipment research, and talent development and to bring resilience to the semiconductor supply chain.
- A nine-member task force was constituted by the Ministry of Electronics and Information Technology (MeitY) in March 2023 with the primary goal of making India a ‘product developer and manufacturing nation’, as per a report. The members of the task force are some of the veterans from the Indian electronic industry, including HCL Founder Mr. Ajay Chowdhary, Lava International Chairman Mr. Hari Om Rai, and Boat Lifestyle Co-Founder Mr. Aman Gupta, among others.
- In March 2023, the Government approved the setting up of the Electronics Manufacturing Cluster (EMC) at Hubli-Dharwad in Karnataka, worth US$ 22 million (Rs. 180 crore) and is expected to create about 18,000 jobs.
- As global companies are leveraging the well-developed manufacturing system in the State, Tamil Nadu has emerged as one of the major electronics hardware manufacturing and exporting States in the country. The state is well positioned to achieve a US$ 100 billion ESDM industry in the next five years.
- The India Cellular and Electronics Association in February 2023 signed a memorandum of understanding with the Uttar Pradesh government to facilitate investments as the electronics manufacturing and skill hub to cater to domestic demand and exports. The government has set a target to achieve US$ 300 billion of electronics manufacturing by 2025-26, out of which US$ 75-100 billion of electronics manufacturing is expected from UP.
- Mitsubishi Electric India would invest Rs. 1,891 crore (US$ 230.9 million) to build an air conditioner and compressor factory in Tamil Nadu. This facility will generate over 2,000 jobs, 60% of which will be held by women.
- Vedanta Group signed memorandums of understanding (MoUs) with 20 Korean companies from the display glass industry for the development of an electronics manufacturing hub in India. The MoUs were signed at the 'Korea Biz-Trade Show 2023' event organised by KOTRA, in collaboration with Korea's Ministry of Trade, Industry, and Energy.
Government Initiatives
The Government of India has adopted a few initiatives for the ESDM sector in the recent past, some of these are as follows:
- As of January 2026, India has approved 10 projects under the India Semiconductor Mission (ISM), with a cumulative investment of Rs. 1.60 trillion (US$ 18.1 billion), under the flagship outlay of Rs. 76,000 crore (US$ 8.6 billion). As highlighted in the Economic Survey 2025–26, these initiatives position India among a select group of middle-income economies transitioning towards more advanced and sophisticated production structures.
- The Government of India approved 22 proposals under the ECMS, led by major players including Foxconn (Yuzhan Technology India), Samsung Display, Tata Electronics, and Dixon Technologies, with a projected investment of Rs. 41,863 crore (US$ 4.76 billion) and expected production worth Rs. 2,58,152 crore (US$ 29.34 billion), generating 33,791 direct jobs across eight states.
- As of December 2025, the Electronics Components Manufacturing Scheme (ECMS) has recorded investment commitments of Rs. 1,15,351 crore (US$ 13.0 billion), nearly doubling the original target of Rs. 59,350 crore (US$ 6.7 billion). The scheme is expected to generate production worth Rs. 10,34,751 crore (US$ 116.9 billion) over the next six years, around 2.2 times higher than initial projections. The projected incentive outlay stands at Rs. 41,468 crore (US$ 4.7 billion), approximately 1.8 times the original estimate of Rs. 22,805 crore (US$ 2.6 billion). Additionally, the scheme is expected to create around 1,41,801 direct jobs, significantly exceeding the initial target of 91,600, along with substantial indirect employment opportunities.
- As of December 2025, a total of 11 Electronics Manufacturing Cluster (EMC) projects and 2 Common Facility Centre (CFC) projects have been approved, covering 4,399.68 acres. The combined project cost stands at Rs. 5,226.49 crore (US$ 590.6 million), including Central financial assistance of Rs. 2,492.74 crore (US$ 281.9 million).
- Under India’s Production Linked Incentive (PLI) scheme, electronics manufacturing, particularly mobile phones recorded a significant production increase of 146% to Rs. 5.45 lakh crore (US$ 61.6 billion) in FY25, driven by strong investor interest and robust foreign direct investment inflows.
- On November 17, 2025, the Ministry of Electronics and Information Technology approved 17 projects under the Electronics Component Manufacturing Scheme (ECMS), with investments of Rs. 7,172 crore (US$ 809.48 million) and expected production worth Rs. 65,111 crore (US$ 7.34 billion). The projects span nine states/Union Territories and are projected to create approximately 11,808 direct jobs.
- The Indian government has disbursed Rs. 1,596 crore (US$ 184.33 million) under the Production-Linked Incentive (PLI) schemes for six sectors, including electronics and pharma, during the H1 of the FY25 (April-September 2024).
- In March 2024, Prime Minister Mr. Narendra Modi laid the foundation stone for three semiconductor plants, with a total investment exceeding Rs. 1.25 lakh crore (US$ 15.02 billion), positioning India to become a global semiconductor hub.
- The inaugural Future Skills Summit was organized by the Ministry of Electronics and Information Technology (MeitY) in collaboration with the National Institute of Electronics and IT (NIELIT) in Guwahati on February 15, 2024.
- The Government attaches high priority to electronics hardware manufacturing, and it is one of the important pillars of both the “Make in India” and “Digital India” programs of the Government of India.
- The National Policy on Electronics (NPE) 2019 envisions to position India as a global hub for ESDM by encouraging and driving capabilities in the Country for developing core components, including chipsets and by creating an enabling environment for the industry to compete globally.
- By 2030, ADIF, a think tank for IT start-ups, aims to put India among the top three start-up ecosystems in the world, with an emphasis on expanding the knowledge base, encouraging collaboration and outlining the best policies.
- Ministry of Electronics & Information Technology (MeitY) has announced a “Scheme for Promotion of Semiconductor Eco-System” in India with a massive outlay of Rs. 76,000 crore (US$ 9.48 billion) in 2022.
- Under the production-linked incentive (PLI) scheme for IT Hardware Products, the Ministry of Electronics and Information Technology has approved 14 qualified applicants. To manufacture these products in India, the government will offer incentives of US$ 983.76 million over the next four years. In this duration, production worth US$ 21.62 billion and exports of US$ 8.06 billion are expected.
- About 80% of the Production-Linked Incentive scheme (PLI) to encourage manufacturing in the country, which covers 14 industries and has a total investment of Rs. 3 lakh crore (US$ 38.99 billion) is concentrated in only three sectors: electronics, automobiles, and solar panel production.
- The PLI scheme for large-scale electronics manufacturing launched by the Ministry of Electronics and Information Technology (MeitY) in April 2020 has been extended from the existing five years band (FY21-FY25) to six years (FY21-FY26).
- To accelerate quantum computing-led research & development and enable new scientific discoveries, the Ministry of Electronics and Information Technology (MeitY), in collaboration with Amazon Web Services (AWS), will establish a quantum computing applications lab in the country.
- A fund of Rs. 3.2 crore (US$ 433.46 thousand) for three years has been approved by the Department of Electronics, IT, BT, Science & Technology.
- Under the PLI scheme for IT Hardware, the approved enterprises are estimated to manufacture equipment worth >US$ 21.62 billion over the next four years. Of the total production, foreign companies have suggested production worth US$ 11.38 billion, whereas domestic enterprises have planned a production of US$ 10.20 billion.
Road Ahead
India’s Electronics System Design and Manufacturing (ESDM) sector is poised for significant growth, supported by rising domestic consumption, shifting global supply chain dynamics, and a series of policy initiatives designed to strengthen indigenous manufacturing. The current environment offers one of the most advantageous periods for the sector, with smooth policy implementation and the removal of restrictive regulations likely to further boost investor confidence and attract large-scale manufacturing investments.
Global majors such as Sony, Samsung, LG Electronics, and Panasonic continue to lead the Indian market, while government programmes like Digital India, Smart Cities, e-Panchayats, and the National Optical Fiber Network are bridging the digital divide and expanding consumer access. The rapid rise of India’s middle class has improved affordability, while changing consumer preferences, increasing disposable incomes, and growing demand for smart and innovative devices (such as smart LED TVs) are driving sustained demand for electronic goods. With strong policy support, substantial investments from both public and private stakeholders, and robust consumer demand, the ESDM sector is on a strong growth trajectory. It is expected to reach US$ 220 billion
by 2025, expanding at a CAGR of 16.1% between 2019 and 2025, positioning India as a global hub for electronics manufacturing.
References: Media reports, Ministry of Electronics and Information Technology (MeitY), Make in India, Union Budget 2026-27, Press Information Bureau, News Articles
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