India’s Electronics Manufacturing Value Addition Surges to 70%, Projected to Reach 90% by FY27
India’s electronics manufacturing sector is witnessing unprecedented growth, with value addition climbing from just 30% to 70% over the past few years. The sector is now poised to reach 90% value addition by the fiscal year 2026-27 (FY27), signaling a major leap toward self-reliance and global competitiveness. This remarkable progress is being driven by robust government support, evolving policy frameworks, and a rapidly expanding domestic ecosystem.
Electronics Exports and Import Substitution
India has made significant strides in reducing its dependency on imported finished products. Mobile phone exports have grown 77 times over the past decade, highlighting the country’s ascent as a key global player. At the same time, the import of fully built air conditioners has sharply declined—from 35% in FY19 to just 5% in FY25—as more components like compressors, copper tubes, and aluminum coils are now being produced domestically.
Strengthening Domestic Ecosystem
The rising demand for Printed Circuit Board Assemblies (PCBA) in both industrial and consumer sectors has been supported by higher import duties and incentives aimed at encouraging domestic production. This shift has enabled local producers to take a stronger position in the value chain, reducing reliance on foreign suppliers.
As of FY24, domestic electronics production has surpassed imports by approximately 24%, marking a fundamental change in the sector’s trade dynamics. Electronics exports have registered a robust compound annual growth rate (CAGR) of about 26% from FY16 to FY25.
Policy Support and Global Opportunities
The transformation has been underpinned by flagship government initiatives such as the Production Linked Incentive (PLI) scheme, Phased Manufacturing Program (PMP), and the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS). These are complemented by a reduced 15% corporate tax rate for new manufacturing units, enhancing the ease of doing business in India.
Additionally, India’s emergence as a preferred destination under the global “China +1” diversification strategy, coupled with simplified export logistics, is accelerating foreign investment in the sector.
Currently ranked as the world’s second-largest mobile phone producer, India manufactures around 99% of all mobile phones sold domestically. This reflects not only the success of the “Make in India” initiative but also the growing capability of Indian manufacturers to deliver quality, scale, and innovation for both domestic and global markets.
With projections pointing to 90% value addition by FY27, India is clearly positioning itself as a future powerhouse in electronics manufacturing.
