India must make more components to keep electronics exports growing, says NITI Aayog

India’s electronics exports rose at an average annual rate of 17.2 percent between 2015 and 2024, much faster than global import growth of 4.4 percent, according to NITI Aayog’s report.

• India must boost component making and design for export growth
• Electronics exports rose 17.2 percent yearly from 2015 to 2024
• Report urges reforms to cut cost gaps with China and Vietnam

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India needs to move beyond just assembling electronics and start making more components and design work at home to keep its exports growing, NITI Aayog said in its sixth edition of Trade Watch Quarterly for July–September, which was released on February 13.

While electronics emerged as a “strategic pillar” of India’s export transformation, the next phase of growth would require structural reforms to address cost disadvantages and supply-chain gaps, it said.

Electronics exports have grown rapidly over the past decade, led by smartphone assembly. However, imports remain concentrated in high-value inputs such as chips, semiconductors, displays and batteries. Chips account for over a quarter of global electronics demand but India’s share in this segment is just 0.02 percent, it said.

India’s electronics exports rose at an average annual rate of 17.2 percent between 2015 and 2024, much faster than global import growth of 4.4 percent, the report said. Mobile phones and telecom equipment led the export basket, accounting for over half of India’s exports.

In 2024, India exported about $33.9 billion worth of electronics across the top 12 product categories, giving it a global share of just under 1 percent.

The report stressed the need to deepen value-chain participation. “Deepen value-chain participation by moving beyond assembly into components, sub-systems, and design-led manufacturing.”

It added that scale economies and integration into global production networks would be essential.

The report flagged significant competitiveness gaps versus China and Vietnam. India faces a “10–14 percent cost disadvantage in assembly and 14–18 percent in components,” it said, adding “high capital costs and logistics add to competitiveness gaps.”

“While electronics capital equipment is imported at zero duty, inputs face higher tariffs, discouraging domestic production. Duty rationalisation is key to localisation as it aids importing of inputs,” the report said.

It also emphasised reducing operational frictions through “streamlining approvals, standards, certifications, and customs processes”.

India must move beyond firm-level incentives and adopt an ecosystem-driven strategy, it said, further recommending strengthening export finance and attracting global anchor firms to drive technology transfer and market access.

Long-term policy predictability was identified as a core requirement for sustaining investments in capital-intensive sectors like electronics.

The report said India has demonstrated its ability to gain global market share when “policy, scale, and industry align” but cautioned that sustained competitiveness would hinge on ecosystem reforms and technological upgrading.