Chips, components, hardware: India targets 40% local value in electronics as manufacturing push deepens

India is looking to deepen its electronics manufacturing ecosystem as part of the broader Semicon 2.0, with domestic value addition emerging as a key focus. S Krishnan, Secretary, Ministry of Electronics and Information Technology (MeitY), said the Electronics Component Manufacturing Scheme (ECMS) is helping deepen the value chain of electronics manufacturing in India.

The government wants to achieve a target of 40% value addition through the combined impact of the India Semiconductor Mission (ISM), mobile manufacturing, the Production Linked Incentive (PLI) scheme for electronics hardware and ECMS. The push comes at a time when demand for memory is also rising sharply, driven in part by AI workloads.

Micron CEO Sanjay Mehrotra said the company's Sanand facility in Gujarat has already begun commercial production, with finished DRAM and NAND products being shipped to customers worldwide. Micron’s latest filing also shows how tight the memory market has become, with its DRAM average selling prices rising about 140 per cent and NAND prices increasing about 130 per cent in the first nine months of 2026 compared with the same period a year earlier.

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ECMS to deepen India's electronics value chain

Krishnan said the ECMS scheme is deepening the value chain of electronics manufacturing in India. The focus is not limited to increasing production but also on expanding the amount of value created within the country.

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As electronics manufacturing deepens, India could move beyond being focused only on components, according to Krishnan. This would allow the country to build a broader manufacturing ecosystem and increase the share of value generated domestically.

The change can already be seen in the value addition figures. India’s value addition to the electronics manufacturing ecosystem has grown to almost 22% to 23%, compared with around 12% to 15% earlier.

Government targets 40% value addition

The next target is significantly higher. S Krishnan said the government wants the India Semiconductor Mission and mobile manufacturing, the PLI scheme for electronics hardware and ECMS together to reach 40 per cent value addition in the country.

This target places domestic value creation at the centre of India’s electronics manufacturing strategy. Instead of relying only on manufacturing or assembling products, the broader approach is focused on strengthening the value chain within India.

For consumers, deeper domestic manufacturing could eventually mean that more parts of the electronics products being made in India are sourced or produced within the country. The government’s 40 per cent target therefore signals a push to increase India’s contribution across the electronics manufacturing value chain as the country continues to build its semiconductor ecosystem.