India's Electronics Sector Shifts Towards Component Manufacturing, Eyes $12 Lakh Cr Market

India's electronics sector is undergoing a strategic shift from being a final-assembly destination to building deep domestic value addition through component manufacturing. Over the past five years, total electronics production has more than doubled, rising from Rs 5.5 lakh crore in 2021 to Rs 12.1 lakh crore in 2026, while exports have surged nearly fivefold, according to a Jefferies report. In 2026, electronic goods became India's third-largest export category by value, with smartphones emerging as the single largest exported product. Nearly 99% of mobile phones sold in India today are assembled domestically due to the success of the Mobile PLI scheme launched in 2021. Companies like Foxconn, Tata Electronics, and Samsung have scaled up local production, with India now accounting for over 25% of global iPhone output. In 2025, India even surpassed China as the top exporter of smartphones to the United States, indicating global firms are diversifying supply chains away from China. However, despite high assembly volumes, domestic value addition remains below 15%. Most critical components, such as display modules, camera sensors, and multi-layer PCBs, are still imported. The government launched the Electronics Components and Materials Scheme (ECMS) in April 2025, with an initial outlay of Rs 229 thousand crore, which was later increased to Rs 400 thousand crore in the 2027 budget. So far, 106 projects have been approved under ECMS, with committed capital expenditure of around Rs 695 thousand crore. The government estimates these investments will generate component production worth Rs 5,340 thousand crore over the scheme's lifetime. Analysts project that ECMS could raise the share of locally made components in mobile phones from less than 20% of the bill of materials today to around 50% by 2032. Major global and Indian companies are stepping up, with investments in mobile and IT hardware enclosures, a lithium-ion battery plant, and a copper laminates unit. Piyush Goyal, the Union Minister for Commerce and Industry, recently tweeted that India is the opportunity for the world, highlighting the country's growing presence in the electronics sector.