Introduction
India’s electronics manufacturing sector grew rapidly in the last ten years. This growth is due to government support, increasing demand within the country, and better connection with global supply chains. As a result, India’s position in the global market has improved, with higher production, more exports, and increased job opportunities. The semiconductor industry in India is also growing alongside the expanding domestic market. This growth is also supported by international involvement, shown by events like SEMICON India 2025, which saw participation from over 300 exhibitors across 18 countries.
Despite strong growth, India’s electronics sector still faces a major constraint due to low domestic production of components. To achieve the USD 500 billion production target by 2030, component demand is expected to rise nearly fivefold from USD 45.5 billion in 2023 to around USD 240 billion, with PCBAs alone accounting for about USD 139 billion.2 While India has built strength in final assembly, especially in mobile phones, it captures limited value because components and sub-assemblies are largely imported.
The next phase of growth will therefore depend on deeper localisation, which can increase value addition, reduce import dependence, and improve export competitiveness. Recent policy steps, such as the approval of semiconductor units in Odisha, Punjab, and Andhra Pradesh with ₹4,600 crore investment and 2,000 jobs, indicate movement in this direction, but risks remain in terms of cost competitiveness, continued import reliance, and challenges in scaling semiconductor capacity.3 India’s electronics sector must shift from assembly-led scale to upstream component and semiconductor manufacturing to capture higher value and reduce import dependence.
| Table 1 | |||
| Metric | FY 2014-15 | FY 2024-25 | Growth |
| Electronics Production | ₹1.9 lakh crore | ₹11.3 lakh crore | ~6x |
| Electronics Exports | ₹38,000 crore | ₹3.27-3.3 lakh crore | ~8x |
| Mobile Phone Production | ₹18,000 crore | ₹5.45 lakh crore | ~28x |
| Mobile Phone Exports | ₹1,500 crore | ₹2 lakh crore | 127x |
| Mobile Phone Import Value | ₹48,609 crore | ₹7,665 crore (FY24) | -84% |
| Mobile Mfg. Units | 2 units | 300+ units | 150x |
| Jobs Created (decade) | — | 25 lakh | — |
| FDI (since FY21) | — | USD 4 bn+ | — |
Source: PIB Report | Infomerics Economic Research
Global Semiconductor Industry and Geopolitical Context
Global Market Scale
According to NITI Aayog, the global electronics industry is about USD 4.3 trillion and is one of the most important sectors in the world economy. Semiconductors are at the core of this system and support almost all electronic and digital technologies. Global semiconductor sales were more than USD 600 billion in 2024 and are expected to reach around USD 1 trillion by 2030 due to growth in AI, cloud computing, digital connectivity and consumer technologies. The electronics sector works through global value chains where production is divided into stages, such as design, chip making, component production, assembly and distribution. About 70 per cent of global trade and nearly 75 per cent of electronics exports occur through these networks.
Asian economies dominate the high-value stages of these chains, especially semiconductors and components, because of strong industrial systems and global linkages. In comparison, India is mainly focused on final assembly and domestic demand and has limited presence in components and semiconductor production. India’s electronics sector has grown, with market size reaching USD 155 billion in FY23 and production increasing from USD 48 billion in FY17 to about USD 101 billion in FY23. Exports are around USD 25 billion, which is less than 1 per cent of global exports even though India accounts for about 4 per cent of global demand. This reflects a gap where India depends on imports for key components and is not present in high-value segments. To grow further, India needs to move into component manufacturing and semiconductors to increase value addition, reduce import dependence and become more competitive globally.4
Geopolitical Realignment and Supply Chain Restructuring
The COVID-19 pandemic exposed major weaknesses in the global semiconductor supply chain. Lockdowns and transport disruptions caused chip shortages across industries like automobiles, consumer electronics, and industrial equipment. This showed the risk of depending on a few countries for production. Semiconductor manufacturing is highly concentrated in a few East Asian economies, such as Taiwan, South Korea, China, and Hong Kong. At the same time, integrated circuits make up about 26.2 per cent of global electronics demand, which increases the risk of supply disruptions.
Dr. Manoranjan Sharma, Chief Economist
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