India makes more electronics, but how much value does it actually add?
India’s electronics production and exports have surged, but rising output does not necessarily translate into higher domestic value addition. The next phase of Make in India will depend on whether the country can manufacture more components, build engineering capabilities and reduce dependence on imported inputs.
- Oct 27, 2026,
- Updated Oct 27, 2026 3:20 AM IST
India’s electronics production and exports have surged over the past decade. But building a stronger domestic component ecosystem, engineering capabilities and skilled workforce will be critical to increasing the value retained within the country.
India's electronics manufacturing sector has expanded rapidly, with production rising from ₹1.9 lakh crore in 2014-15 to ₹13.11 lakh crore in 2025-26. Exports have climbed from ₹38,263 crore to ₹4.24 lakh crore over the same period, according to figures cited in the industry material.
However, rising production does not automatically translate into higher domestic value addition. The value retained in India also depends on how much of a product's components, technology, design and engineering are developed and manufactured locally.
Speaking to Business Today, Ashutosh Gupta, Director of Sales & Marketing at Summercool Home Appliances, said India’s manufacturing priorities need to evolve beyond expanding production capacity.
“The first phase of Make in India was largely about creating capacity, attracting investments and getting products manufactured in the country. The next opportunity is to go deeper from building capacity to developing the components, engineering capabilities and skilled talent that create greater value within India,” he said.
Why production numbers tell only part of the story
Electronics manufacturing spans several stages, from product design and component development to assembly, testing and distribution. When manufacturers import components and assemble finished products locally, the activity contributes to domestic manufacturing output and employment. However, the opportunity for value creation is greater when more stages of the supply chain are located in India.
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Semiconductors, displays, sensors, electronic controls and other sophisticated components can represent significant portions of a product's cost. Consequently, gross production and export figures alone cannot establish how much value is generated domestically.
Building the components behind the products
India's next challenge is to develop a stronger domestic supplier ecosystem. This includes manufacturers of motors, electronic controls, plastics, sheet metal and other components used across electronics and consumer durables.
The Electronics Component Manufacturing Scheme (ECMS) is intended to support this transition. According to the industry data, 38 factories under the scheme had started operations, while another 16 were progressing through construction and machinery installation.
Gupta said the expansion of domestic component manufacturing could create opportunities for consumer-durable manufacturers by enabling more integrated supply chains and improving cost and quality efficiencies.
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However, localisation must be commercially viable. “Cost competitiveness, quality and scalability have to move together. The opportunity is to build Indian suppliers that are competitive enough not only to replace imports but eventually to supply global markets,” he said.
The role of technology and talent
Building components locally is only one part of the challenge. Manufacturers also need the engineering expertise, production technology and skilled workforce required to manufacture them consistently and competitively.
“Manpower availability alone will not be enough. Companies will need people who can work with new machines and technology, understand quality systems and troubleshoot increasingly sophisticated production processes,” Gupta said.
Developing these capabilities could help India move beyond assembly towards more complex manufacturing activities, including engineering, product development and technology creation.
What should India measure next?
India has demonstrated its ability to expand electronics production and exports. The next measure of progress should include domestic sourcing, component manufacturing capacity, import dependence and the development of locally built engineering capabilities.
The objective is not to manufacture every component domestically overnight, but to steadily increase local value addition while building globally competitive supply chains.
As Gupta put it, the next chapter of Make in India will be defined by how much of what goes into products can increasingly be “designed, engineered, manufactured and supported by capabilities built in India.”
India’s electronics production and exports have surged over the past decade. But building a stronger domestic component ecosystem, engineering capabilities and skilled workforce will be critical to increasing the value retained within the country.
India's electronics manufacturing sector has expanded rapidly, with production rising from ₹1.9 lakh crore in 2014-15 to ₹13.11 lakh crore in 2025-26. Exports have climbed from ₹38,263 crore to ₹4.24 lakh crore over the same period, according to figures cited in the industry material.
However, rising production does not automatically translate into higher domestic value addition. The value retained in India also depends on how much of a product's components, technology, design and engineering are developed and manufactured locally.
Speaking to Business Today, Ashutosh Gupta, Director of Sales & Marketing at Summercool Home Appliances, said India’s manufacturing priorities need to evolve beyond expanding production capacity.
“The first phase of Make in India was largely about creating capacity, attracting investments and getting products manufactured in the country. The next opportunity is to go deeper from building capacity to developing the components, engineering capabilities and skilled talent that create greater value within India,” he said.
Why production numbers tell only part of the story
Electronics manufacturing spans several stages, from product design and component development to assembly, testing and distribution. When manufacturers import components and assemble finished products locally, the activity contributes to domestic manufacturing output and employment. However, the opportunity for value creation is greater when more stages of the supply chain are located in India.
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Semiconductors, displays, sensors, electronic controls and other sophisticated components can represent significant portions of a product's cost. Consequently, gross production and export figures alone cannot establish how much value is generated domestically.
Building the components behind the products
India's next challenge is to develop a stronger domestic supplier ecosystem. This includes manufacturers of motors, electronic controls, plastics, sheet metal and other components used across electronics and consumer durables.
The Electronics Component Manufacturing Scheme (ECMS) is intended to support this transition. According to the industry data, 38 factories under the scheme had started operations, while another 16 were progressing through construction and machinery installation.
Gupta said the expansion of domestic component manufacturing could create opportunities for consumer-durable manufacturers by enabling more integrated supply chains and improving cost and quality efficiencies.
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However, localisation must be commercially viable. “Cost competitiveness, quality and scalability have to move together. The opportunity is to build Indian suppliers that are competitive enough not only to replace imports but eventually to supply global markets,” he said.
The role of technology and talent
Building components locally is only one part of the challenge. Manufacturers also need the engineering expertise, production technology and skilled workforce required to manufacture them consistently and competitively.
“Manpower availability alone will not be enough. Companies will need people who can work with new machines and technology, understand quality systems and troubleshoot increasingly sophisticated production processes,” Gupta said.
Developing these capabilities could help India move beyond assembly towards more complex manufacturing activities, including engineering, product development and technology creation.
What should India measure next?
India has demonstrated its ability to expand electronics production and exports. The next measure of progress should include domestic sourcing, component manufacturing capacity, import dependence and the development of locally built engineering capabilities.
The objective is not to manufacture every component domestically overnight, but to steadily increase local value addition while building globally competitive supply chains.
As Gupta put it, the next chapter of Make in India will be defined by how much of what goes into products can increasingly be “designed, engineered, manufactured and supported by capabilities built in India.”