Why India's Electronics Manufacturing Is Growing Faster Than Ever

Something shifted in a factory in Tamil Nadu's Sriperumbudur in the spring of 2023. Workers began assembling iPhone 15 units — the same model simultaneously rolling off production lines in Zhengzhou, China. It was, for many observers, a symbol of a long-awaited inflection point in India's manufacturing story. But the Apple story, compelling as it is, is only the most visible thread in a much larger and faster-moving tapestry.

The $101 Billion Milestone and the ₹4 Lakh Crore Target

India's total electronics production crossed $101 billion in FY2023, up from $75 billion in FY2021 — a 35 percent jump in two years. The government's stated ambition is to reach $300 billion by 2026, a target that once drew scepticism but is looking increasingly within reach given current trajectory. Mobile phones are the standout performer. India is now the world's second-largest mobile manufacturer by volume, producing over 330 million handsets in FY2023. Exports of mobile phones crossed $11 billion in the same year — a 100 percent jump from $5.5 billion in FY2022. The Production Linked Incentive scheme for Large-Scale Electronics Manufacturing, which disbursed ₹4,403 crore in incentives in FY2023, is widely credited as the accelerant. Samsung, Foxconn (assembling for Apple), Dixon Technologies, and Optiemus have all scaled up significantly under the scheme.

The China-Plus-One Factor

The geopolitical context cannot be overstated. US-China tensions, the COVID-era supply chain shock, and a growing appetite among multinational corporations to diversify production away from a single geography have created what industry insiders call the China-plus-one window for India. Apple has been the most high-profile beneficiary of this narrative, but the shift is broader. Google has started assembling Pixel phones in India. Samsung has been manufacturing in Noida for years and has deepened its commitment. Taiwanese contract manufacturer Foxconn announced a massive 1,600-acre campus in Telangana. In the components ecosystem, Foxconn's Yongtai Technology subsidiary is setting up a display manufacturing unit, and several Korean and Taiwanese component makers are exploring India as a secondary base — which, if it materialises, would be a genuine game-changer for the depth and indigenisation of the supply chain.

The Components Challenge: India's Achilles Heel

Here is the uncomfortable truth that every industry veteran will tell you: India is assembling electronics, not manufacturing them in the deepest sense. The components — semiconductors, displays, camera modules, batteries, PCBs — are overwhelmingly imported, primarily from China, Taiwan, and South Korea. India's import bill for electronic components was over $36 billion in FY2023. Until that changes, the value addition captured domestically remains limited, and the industry remains vulnerable to supply chain disruptions. The government is aware of this. The PLI scheme for components — covering items like batteries, cameras, charger ICs, and passive components — was specifically designed to address it. But component manufacturing requires specialised process knowledge and high capital intensity, and the uptake has been slower than hoped.

The Workforce Question and the Path Forward

India's electronics manufacturing surge is a jobs story as much as an industrial one. The sector employs over 2 million people directly, with projections of 6 million by 2030 if the growth trajectory holds. The challenge is skilling. Electronics manufacturing requires precise, repeatable production skills that are distinct from general factory work. Companies like Dixon Technologies have invested heavily in in-house training centres. The government's Skill India programme has expanded electronics-focused modules. Whether these efforts can produce the volume and quality of trained workers that a $300 billion industry demands remains the central workforce challenge. The manufacturing momentum is real and accelerating. The depth of that manufacturing — how much genuine value India captures versus merely assembles — will determine whether this is a lasting industrial transformation or a glorified screwdriver economy.