India's Electronics Component Manufacturing Poised for Growth

New Delhi, Jun 4 (KNN) India's electronic manufacturing industry is expected to see its next phase of growth driven by domestic component manufacturing, according to analysts.

The report notes that while imports of finished electronic goods like mobile phones, TVs, and ACs have slowed in recent years, the industry still relies heavily on imported components.

However, government initiatives like production-linked incentive (PLI) schemes are encouraging companies to ramp up local component manufacturing through backward integration.

"We expect the growth of the electronics manufacturing sector to continue across the full supply chain, supported by factors including the development of domestic semiconductor capabilities and increasing domestic sourcing of necessary components," the BNP Paribas report stated.

Over the past decade, India's electronic components manufacturing grew at a compound annual rate of 13 per cent, lagging behind the overall 19 per cent CAGR for the broader electronics manufacturing industry.

The government aims to boost electronics production from USD 100 billion in FY2023 to an ambitious USD 300 billion by FY2026.

The electronic manufacturing services (EMS) industry is projected to expand rapidly, with its total addressable market expected to grow at 27 per cent annually to reach USD 100 billion in revenue by FY2027.

Domestic EMS players are anticipated to more than double their revenue to USD 55 billion and capture 5 per cent global market share during this period.

Analysts cited factors like growth in local manufacturing capabilities, global firms diversifying production away from China, and the relative attractiveness of India as an investment destination as key drivers of this EMS industry expansion.

(KNN Bureau)