India’s Electronics Industry Sees Growth but Faces Challenges in Design & Component Manufacturing: Economic Survey
India’s electronics sector has witnessed significant growth in domestic manufacturing and exports, but progress in design and component manufacturing remains limited, according to the Economic Survey 2024-25.
The survey highlights that India’s electronics production has grown at a CAGR of 17.5%, rising from ₹1.90 lakh crore in FY15 to ₹9.52 lakh crore in FY24. Additionally, smartphone imports have dropped drastically, with 99% of mobile phones now produced domestically. In FY24, India manufactured 33 crore mobile phones, over 75% of which were 5G-enabled.
Make in India & PLI Drive Domestic Production
Government initiatives like Make in India and Digital India have fueled foreign investments and domestic manufacturing, supported by improved infrastructure and ease of doing business. The Production Linked Incentive (PLI) scheme has been a key driver in scaling up local manufacturing, significantly reducing dependence on imports.
In FY15, mobile phone imports accounted for 78% of the market in value terms, but by FY23, this figure had dropped to just 4%. In terms of volume, only 0.8% of mobile phones were imported in FY23. Exports have also surged, with mobile phone exports rising from zero in FY16 to ₹88,726 crore in FY23.
Challenges in Design & Component Manufacturing
Despite this progress, India’s electronics industry represents only 4% of the global market and remains largely assembly-focused. The country is yet to achieve significant advancements in semiconductor design and component manufacturing, which are crucial for reducing import dependency.
The PLI scheme, introduced across 14 key sectors, is expected to strengthen India’s electronics manufacturing ecosystem. However, the survey emphasizes the need for a sector-specific strategy rather than a one-size-fits-all approach to further enhance local capabilities in design, R&D, and semiconductor fabrication.
Source: The Economic Times
