Beyond assembly: India’s next electronics opportunity lies in components

India’s electronics manufacturing story has entered a new phase. A decade ago, the focus was clear: reduce import dependence and build assembly capacity. Today, the ambition is far broader. India is evolving from a consumption-led electronics market into a credible manufacturing base, particularly in mobile phones and other high-volume devices.

That progress now sets up a more important question for the sector: what comes after assembly-led scale? The answer lies in whether India can deepen its role in the value chain by building strength in components, parts, and sub-assemblies. This is where the economics of manufacturing become stronger, supply chains become more resilient, and export competitiveness becomes more credible.

Components are the next frontier

India has already shown that it can build scale in electronics assembly. With electronics production increasing more than five times in last 10 Year to estimated more than 12 trillion. Mobile manufacturing in particular is the shining success of Make in India with more than 300 manufacturing units in mobile ecosystem, compared with just two in 2014. That expansion matters because it demonstrates that industrial capacity can be created quickly when policy support, market demand, and execution align.

Assembly captures one part of the value chain. Scale is the most important ingredient to build the supply chain. In electronics, the larger and more durable gains come from building the ecosystem beneath the finished product: printed circuit boards, camera modules, mechanics, display-related parts, laminates, connectors, and other critical sub-assemblies. As we move towards the vision of building $500 billion electronics manufacturing ecosystem deepening of supply chain is the important milestone which we need to conquer as nation. A country that only assembles remains vulnerable to imported inputs. A country that manufactures a larger share of components builds greater economic depth and stronger industrial leverage.

Policy is beginning to reflect this shift

India’s policy environment is now signaling that deeper manufacturing is the next priority in addition to building scale in the finished products. The production linked incentive (PLI) framework helped create confidence in finished goods and made electronics manufacturing a serious national industrial project. The next layer of support is now moving closer to the supply chain itself.

The electronics components manufacturing scheme is an important inflection point in this transition. With an approved outlay increased to Rs 400 billion from Rs 230 billion, it signals a clear policy push towards strengthening domestic capabilities in electronics components and reducing structural dependence on imports. What makes this particularly significant is the continuity of intent. In sectors like electronics, sustained policy direction often determines whether growth remains incremental or evolves into a durable, self-reinforcing ecosystem.

Early industry response offers a meaningful indicator of this intent translating into action. The first face of approved projects under the scheme together account for investments estimated Rs 550 billion. These commitments suggest that manufacturers are beginning to see both demand visibility and policy stability as credible enough to invest in deeper, more complex capabilities within India.

Why this matters for business

For business leaders, this transition is about the quality of growth. Assembly creates scale. Component manufacturing creates depth. It demands precision, stronger engineering, and tighter process control, but it also allows companies to capture a greater share of value and build more durable competitive advantage.

It also changes the profile of investment. Companies that participate in higher-value manufacturing are often better placed to attract long-term capital because they are building industrial capability rather than relying only on final-stage volume. Now it is time for Indian industry to standup with a global vision to participate in this supply chain revolution in India. The government of India is doing its part by creating an enabling ecosystem, it is the responsibility of the industry now to build a globally competitive ecosystem.

Localisation is also a supply chain strategy

In electronics, where supply chains are globally distributed and often tightly timed, dependence on imported components can quickly become a structural weakness. Localisation does not eliminate risk, but it reduces vulnerability. It improves turnaround times, gives manufacturers greater control over production planning, and allows faster response to changes in market demand.

For Indian businesses, that has practical implications. A stronger domestic components base can support shorter lead times, more stable sourcing, and better coordination between design, manufacturing, and delivery. These are not secondary efficiencies. They influence working capital, customer responsiveness, and overall competitiveness.

The export opportunity will depend on ecosystem depth

India has already proven that it can build scale in electronics. The next challenge is to build globally competitive supply chain capabilities that brings value within that scale.

The countries that lead in manufacturing are not defined by how much they assemble, but by how much they create within the product itself. For India, this is the inflection point. The next phase will be defined by those who invest early in components and ecosystem depth, and in doing so, shape India’s position in global supply chains.