India's electronics market largely assembly-focused; represents just 4% of the global share: Economic Survey

electronics

India’s electronics market represents 4 percent of the global market, with the local industry primarily focused on assembly and showing limited progress in design and component manufacturing, according to the Economic Survey 2025.

The domestic production of electronic goods has increased substantially from Rs 1.90 lakh crore in FY15 to Rs 9.52 lakh crore in FY24, growing at a CAGR of 17.5 percent.

Notably, the Ministry of Electronics and Information Technology (MeitY) proposal for the long-awaited component manufacturing scheme will soon get the Cabinet nod. The new scheme aims to increase domestic value addition in electronics components from 15-18 percent to 35-40 percent initially, with a long-term goal of 50 percent.

The government hopes the scheme will generate electronics component production worth $50–60 billion over its five-to-six-year tenure.

India has also drastically reduced its dependence on smartphone imports, with 99 percent now manufactured domestically. In FY24, the country produced approximately 33 crore mobile phone units, with over 75 percent of the models being 5G-enabled.

The survey said the key growth drivers were large domestic market, availability of skilled talent, and low-cost labour. “Programs such as Make in India and Digital India, along with improved infrastructure, ease of doing business, and various incentives, have boosted domestic manufacturing and attracted foreign investments,” it said.

The production-linked incentive (PLI) scheme has been introduced in 14 key sectors, including electronics. It adopts a sector-specific approach, avoiding a "one size fits all" methodology in the electronics sector. The PLI aims to scale up assembly processes to encourage the existing domestic manufacturing ecosystem.

“The results are evident: in FY15, mobile phone imports accounted for 78 percent of the market in value terms, whereas, by FY23, this figure had dropped to just 4 percent. Regarding volume, only 0.8 percent of mobile phones were imported in FY23. Exports tell a similar story. Mobile phone exports, valued at zero in FY16, soared to Rs 88,726 crore in FY23,” the survey said.

Similarly, in the white goods sector, the scheme seeks to boost domestic value addition, targeting an increase from 15-20 percent to 75-80 percent. The third round of the online application window for the PLI scheme for white goods (air conditioners and LED lights) attracted 38 responses. Forty-three percent of the new applicants are in the MSME sector, demonstrating the confidence among these enterprises to become part of the value chain for manufacturing components of ACs and LED lights.

According to FICCI, the support of the PLI scheme, which encourages local production of key components like compressors, heat exchangers, motors, and controllers, has triggered the development of a complete value chain for key AC components. As the annual size of the room AC market has grown considerably in recent years, import dependency on compressors has reduced. Local capacities for heat exchangers, cross-flow fans, and controller PCBA have also improved.

“The PLI scheme has fostered collaboration across various industry layers. Suppliers of raw materials, component manufacturers, and producers of finished goods, including multinational corporations and local brands, as well as MSMEs, have aligned their requirements,” the survey said.