Over the past decade, India’s industrial policy has evolved from broad initiatives such as Make in India to more targeted, output-linked and component-specific interventions. The production-linked incentive (PLI) schemes for mobile phones, IT hardware, telecom equipment and white goods have laid a strong foundation for large-scale, assembly-led manufacturing.
Building on this progress, the Electronics Components and Modules Scheme (ECMS) has extended policy support to non-silicon components across telecom, automotive, consumer and industrial electronics. In parallel, the India Semiconductor Mission (ISM) is driving the country’s ambitions in silicon manufacturing, focusing on semiconductor and display fabrication, compound semiconductors, and final assembly, testing and packaging. Its second phase, ISM 2.0, places greater emphasis on component manufacturing, capex and ecosystem development.
Industry response to these initiatives has exceeded expectations. Under ECMS, against an anticipated investment of $7.5 billion, commitments of nearly $14 billion-$15 billion have been received, driven by the scheme’s 25 per cent capex support for component and equipment manufacturing. Applications have also been filed at the material component stage, underscoring the scheme’s cross-sectoral design. By enabling manufacturers to serve multiple product segments and global markets, the framework promotes scale and diversification.
On the ground, factory capacity continues to expand. Beyond traditional hubs, states such as Gujarat, Maharashtra, Madhya Pradesh, Andhra Pradesh, Telangana and Karnataka are emerging on the electronics system design and manufacturing map.
Building the fundamentals
India’s telecom manufacturing drive is now centred on strengthening its core pillars, such as skilled manpower, component availability and cost competitiveness. Skill development programmes are being realigned with industry needs, but the shop-floor workforce still requires sustained expansion and practical exposure.
On the supply side, component availability remains a constraint, with a large share of inputs still imported. Closer coordination between government departments is needed to ensure that telecom-specific components receive broader coverage under the ECMS framework. Cost disadvantages are being addressed through a mix of incentives and infrastructure support, including PLIs, telecom manufacturing zones, special economic zones and other fiscal offsets.
Encouragingly, progress is visible in select sub-assemblies. Antenna production, for example, now caters to both domestic and export markets, with localisation levels reaching about 65-70 per cent through casings, enclosures and other mechanical components. However, critical electronic content, such as semiconductors and active or programmable devices, still need focused investment and technology upgrades.
Driving design and innovation
As India’s telecom manufacturing base expands, design is emerging as the key driver of value creation. While software and system integration capabilities are well established, the missing link has been the development and ownership of intellectual property (IP) within the country, particularly in areas such as telecom hardware, radios (including multiple-input multiple-output systems) and network intelligence. The next phase of growth points to a design-led manufacturing model that brings product architecture, printed circuit board design and software control layers under domestic ownership, while sourcing a growing share of components from the ECMS-supported base for both domestic and global production.
Sustained research and development (R&D) will be essential for this transition. Telecom product cycles typically span four to six years, and next-generation technologies such as 6G demand long-term, patient investment. The Rs 1 trillion Research, Development and Innovation (RDI) framework is a timely intervention, but its impact will depend on effective access for Indian equipment manufacturers and inclusive participation by micro, small and medium enterprises (MSMEs) and start-ups. Complementary measures, such as reinstating enhanced tax deductions for certified R&D centres, could further encourage private investment in design and advanced engineering.
Protecting and scaling Indian IP in global markets will be equally important.
Building skills and talent
Developing skilled manpower remains central to India’s manufacturing expansion. The focus spans both immediate shop-floor readiness and long-term educational reform. Practical training through sector-specific academies, international trainer programmes and company-university collaborations is improving employability and technical proficiency.
Balancing competition and collaboration
India’s telecom manufacturing strategy is increasingly shaped by collaboration, not isolation. While “local-for-local” policies are gaining traction worldwide, the broader World Trade Organisation framework continues to coexist with national self-reliance efforts. The pragmatic approach is to scale what is viable today, even at modest margins, while simultaneously building domestic capability in component design, packaging, testing and validation. Contract structures already allow global sourcing where domestic options are limited, a necessary measure to maintain delivery schedules and reliability as local capacity matures.
Partnerships with experienced original design manufacturing ecosystems, particularly in Taiwan, are helping India access established component libraries, engineering databases and decades of production expertise. The objective is not to replicate every process but to retain control over product architecture and component selection so that global silicon and platform suppliers actively compete for partnerships in the Indian market. At the same time, Indian manufacturers are expanding their presence in international markets such as Japan, South Korea, Vietnam, the Middle East and the US. These overseas operations support activities like refurbishing, return merchandise authorisation and supply chain integration, mirroring multi-geography networks that have long underpinned global manufacturing hubs.
India’s approach to digital sovereignty is grounded in integration rather than separation. The goal is to remain part of global value chains while retaining greater ownership of key technologies, IP and talent. Export opportunities can be strengthened through government-to-government lines of credit, traditionally used for infrastructure projects such as bridges and power systems, by extending them to telecom exports.
The way forward
Investor confidence in India’s telecom manufacturing sector is anchored in two key strengths: market scale and talent depth. The PLI scheme for telecom equipment has already attracted investments of about Rs 43.5 billion, created more than 28,000 jobs and generated output worth nearly Rs 850 billion, including Rs 165 billion in exports. To build on this momentum, policy incentives can now evolve from output-based rewards to value-addition benchmarks, linking higher indigenisation with higher incentives. A combined framework that supports both capex and production output would help new factories, testing facilities and design centres take shape alongside manufacturing volumes. This hybrid approach draws on lessons from earlier initiatives such as the Modified Special Incentive Package Scheme, the PLI framework and electronics manufacturing services programmes.
Policy and industry priorities are also shifting toward frontier technologies. Non-terrestrial networks, Wi-Fi, narrowband internet of things and hybrid satellite architectures spanning low-, medium- and geostationary-orbit constellations represent the next wave of growth. Platforms such as the Bharat 6G Alliance and global research consortia are creating opportunities for joint development. In parallel, India is shaping a new identity, moving beyond a cost-efficient production base to an innovation-driven, design-and-IP hub under the “Innovate in India” vision.
Start-up financing within telecom remains limited compared to AI-focused sectors, but structured innovation pipelines can close that gap. Operators can publish problem statements in areas such as AI-driven network optimisation, operations support system/business support system automation and predictive maintenance, while public funds provide seed grants for early prototypes. Once proven on live networks, these solutions naturally attract venture capital. Broader eligibility under RDI and the reinstatement of enhanced R&D tax deductions would enable MSMEs and start-ups to participate more actively alongside larger firms.
Strengthening the supply chain will be equally critical. Even where domestic quality gaps or cost differences remain, allocating a small but fixed share, around 5-10 per cent, of sourcing to capable Indian suppliers can significantly enhance resilience. Policy remains neutral on individual players, but scale is the defining factor for this sector. The overarching goal is clear: enable expansion, reduce uncertainty and position India as a globally competitive telecom manufacturing hub over the next five years.
India’s telecom manufacturing drive has reached a stage where success depends on timely execution. The policy framework through ECMS for components, ISM 2.0 for semiconductors and PLI for production incentives has established a clear foundation. The next phase must focus on bridging component gaps, strengthening domestic sourcing and deepening localisation through a hybrid incentive model that links capital expenditure with output-based rewards. Sustained R&D under the RDI and stronger protection of IP will be crucial to foster design-led innovation and enhance global competitiveness.
At the same time, building a skilled workforce and expanding international linkages will define the sector’s long-term strength. Targeted degree programmes, practical training pipelines and industry-academia partnerships can create employable talent, while government-to-government lines of credit and overseas supply chain partnerships can strengthen India’s export readiness. With coordinated progress across policy, industry and education, the coming years can transform the current manufacturing momentum into a resilient, design-driven telecom ecosystem – built in India, for the world.
