India aims for $500 billion electronics manufacturing target by 2030

India is aiming to become a global hub for electronics production, with a target of $500 billion in electronics manufacturing by 2030, according to the electronics manufacturing report by Rubix Data Sciences. The report noted that rapid growth of the sector is being driven by strategic government policies, strong domestic demand, and shifting global supply chains.

The Production Linked Incentive (PLI) scheme has emerged as a key driver, attracting over $17 billion in investments across sectors like mobile phones, semiconductors, and consumer electronics. The semiconductor market, projected to reach $109 billion by 2030, is benefiting from initiatives such as Tata Electronics’ fabrication plants and Micron Technology’s ATMP facility. These projects aim to localise production and reduce reliance on imports.

India has also seen remarkable growth in smartphone manufacturing, with mobile phone exports increasing by over 40 per cent in FY2024 to $15.6 billion. Domestic value addition in mobile manufacturing shot up from 6 per cent in 2017 to 16 per cent in 2023, with ambitions to reach 50 per cent by 2030. According to the report, global players like Apple and Samsung have leveraged India’s manufacturing sphere, with Tamil Nadu standing out as a major export hub. The state witnessed electronics exports jump from $1.66 billion in FY2021 to $9.56 billion in FY2024, due to the global China Plus One strategy, which positions India as an alternative manufacturing destination.

However, India remains heavily dependent on imports for high-value components such as semiconductors, Printed Circuit Board Assemblies (PCBAs), and chipsets. Electronics imports from China alone exceeded $12 billion in FY2024. High tariffs further complicate matters; India’s average electronics tariff rate of 7.5 per cent results in a cost disadvantage of 10 per cent to 14 per cent in assembly and 14 per cent to 18 per cent in component manufacturing compared to countries like Vietnam and Malaysia.

The report also noted the underinvestment in research and development, with India spending just 0.64 per cent of its GDP on R&D, compared to 2.41 per cent in China and 5.71 per cent in Israel. This limits innovation in areas such as semiconductors and Internet of Things (IoT) devices.

“The electronics industry in India represents a unique blend of opportunities and challenges,” said Mohan Ramaswamy, co-founder and CEO of Rubix Data Sciences. “Companies that act swiftly to invest in innovation and value addition will be at the forefront of this transformation.”

While India charges towards becoming a global electronics manufacturing hub, achieving the $500 billion target will require overcoming structural hurdles such as tariff complexity, infrastructure gaps, and the lack of robust R&D investment.