India's electronics manufacturing sector is experiencing a period of rapid expansion, with projections indicating that it could reach \$500 billion by 2030, potentially rivaling the IT sector in terms of revenue generation. This growth is attributed to a combination of factors, including increasing domestic demand, government incentives, and a realignment of global supply chains.

Growth Drivers and Projections

The Indian government is targeting a \$500 billion domestic electronics ecosystem by 2030-31. Recent data shows the sector's production output has surged from ₹1.9 lakh crore in 2014-15 to ₹11.3 lakh crore in 2024-25, with exports skyrocketing eightfold from ₹38,000 crore to ₹3.27 lakh crore. This expansion has also generated an estimated 25 lakh jobs, establishing the sector as a key contributor to India's employment and economic growth.

While the ambitious target of \$500 billion is aligned with NITI Aayog's vision, some reports suggest more conservative estimates. One such report outlines three potential growth trajectories: a conservative scenario projecting \$282 billion, a moderate scenario estimating \$418 billion, and the ambitious \$500 billion target. Achieving the highest projection will depend on sustained policy support and investments.

Key Growth Areas

Several segments within the electronics sector are expected to drive this growth, including mobile phones, semiconductors, and consumer electronics. Specifically, the mobile and wearables segment is projected to reach \$159 billion by FY2030. India is currently the world's second-largest smartphone market, with manufacturing units increasing from just 2 in 2014 to over 300 today. Exports in this segment have soared 127 times to reach ₹2 lakh crore, largely led by Apple, which alone contributed ₹1.1 lakh crore in device shipments in 2024. In a significant achievement, India surpassed China in Q2 of FY2025-26 to become the largest exporter of smartphones to the United States. The information technology hardware market is also expected to expand, with the electronics segment forecast to reach \$32 billion in the same period.

The telecommunications sector is also undergoing rapid changes, with data traffic surging 60 times over the past five years. By 2026, 5G services are expected to generate more than 65% of total data revenue, significantly increasing demand for telecom electronics and supporting infrastructure. Furthermore, the industrial electronics segment is progressing steadily, with emerging areas such as electric vehicle chargers and smart industrial automation playing a vital role in driving future growth.

Government Support and Policy Initiatives

The Indian government has implemented several policies to establish a robust electronics manufacturing ecosystem. Programs such as 'Make in India', 'Atmanirbhar Bharat', and the Production Linked Incentive (PLI) scheme have played a pivotal role in boosting domestic manufacturing, increasing exports, and attracting over \$4 billion in foreign direct investment (FDI) since FY2020–21. The PLI scheme, launched in 2020, provides financial incentives to companies that meet specific production targets. The government has also approved 17 new projects under the Electronics Component Manufacturing Scheme (ECMS), involving INR 71.72 billion (USD 799 million) in investments and expected to create more than 11,800 jobs.

Challenges and Opportunities

Despite the strong growth potential, the Indian electronics industry faces several challenges. These include capital expenditure constraints, high logistics and compliance costs compared to countries like China and Vietnam, and dependence on imported rare earth minerals. Supply chain localization and skills development are also crucial for sustained growth.

To achieve the \$500 billion target, India needs to focus on expanding component manufacturing, integrating deeper into global value chains, and emphasizing design-led innovation. A NITI Aayog report suggests specific policy measures such as tariff rationalization and skilling to promote domestic electronics manufacturing. The government is also focusing on semiconductor fabrication, assembly, and packaging, aiming to capture approximately 10% of global semiconductor demand by 2030.

Impact and Future Outlook

The growth of the electronics manufacturing sector is expected to have a significant impact on India's economy. It is projected to create 5.5 to 6 million jobs by 2030. The rise of 4G and 5G technologies, increasing internet penetration, and urbanization are also driving demand for smart devices. As India continues to strengthen its electronics manufacturing ecosystem, it is poised to become a major global hub, contributing significantly to the country's economic growth and development.