India's electronics manufacturing sector is poised for increased acquisition activity in 2026, driven by the need for better profit margins and government incentives designed to boost the local tech supply chain. Following a period of stock market adjustments, the top five electronics manufacturers in India are shifting their focus from basic assembly to acquiring companies specializing in niche components such as sensors and circuits. This strategic shift aims to improve profitability and restore investor confidence.
Several Indian electronics firms have already been actively expanding through acquisitions. For example, Dixon Technologies, reported revenue of ₹14,855 crore in a recent quarter, has spent ₹803 crore on acquisitions and joint ventures. Syrma SGS spent ₹235 crore to acquire a 60% stake in Elcome Integrated Systems, which specializes in electronics systems for defense and maritime clients. Furthermore, Kaynes Technology India Ltd. is planning to spend approximately 10% of the ₹1,575 crore it raised from institutional investors on acquisitions, as they look to expand into PCB manufacturing, OSAT (outsourced semiconductor assembly and test) and semiconductor packaging.
Tata Electronics has also been a key player, demonstrated by its acquisition of a controlling stake in Pegatron Technology India Private Limited. This move follows Tata Electronics' acquisition of Wistron's India operations in March 2024 and aligns with the Tata Group's broader investment strategy in electronics manufacturing. In another instance, Indian Link Chain Manufacturers Ltd is set to acquire a majority stake in RRP Electronics to enter the semiconductor, medical devices, and electro-optics sectors.
These acquisitions are motivated by the relatively thin margins in the electronics assembly sector. Companies are seeking to increase margins by moving into industrial electronics, where volumes may be lower, but the value-added margins are significantly higher. Amber Enterprises, for example, is scaling up manufacturing of electronic items like automotive systems and printed circuit boards (PCBs) to improve its operating margin.
The Indian government is actively supporting this trend through various incentive schemes. The Electronics Component Manufacturing Scheme (ECMS) offers capital expenditure subsidies of up to 50% for companies setting up manufacturing of local electronics components. This scheme has a total outlay of ₹22,919 crore. Dixon Technologies, for instance, has submitted an application to the Ministry of Electronics and IT (Meity) under the ECMS to manufacture display modules and camera modules.
These strategic acquisitions and expansions signify a maturing Indian electronics industry aiming for higher value-added activities and increased global competitiveness. The combination of market forces and government support is expected to drive further acquisition activities in the sector throughout 2026.
