India’s Electronics Localisation Drive Gains Ground as Domestic Value Addition Reaches 18–20%

India’s electronics manufacturing story is entering a more consequential phase, with domestic value addition now rising to 18%–20%, a shift that signals movement beyond simple assembly toward deeper localisation across the production chain. According to information cited by the Ministry of Electronics and Information Technology and carried by IBEF, this improvement has come through a broader strengthening of the manufacturing ecosystem, spanning finished products, components, sub-modules, base materials, and capital equipment. The numbers underline the scale of the transformation: India’s electronics production has expanded from Rs. 1.90 lakh crore in 2014-15 to around Rs. 12 lakh crore in 2024-25, while exports have grown from a far smaller base to about Rs. 3.30 lakh crore over the same period. Mobile phone manufacturing has been one of the clearest drivers of this shift, rising from Rs. 18,000 crore to Rs. 5.45 lakh crore, reflecting how India has steadily evolved into a major electronics manufacturing base rather than merely a consumer market for imported devices.

A major engine behind this expansion has been the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing, which has pushed investment, scale, and export momentum across the sector. As of February 2026, the scheme had reportedly generated Rs. 17,519 crore in investments, Rs. 11,01,813 crore in production, and Rs. 6,20,974 crore in exports. It has also supported direct employment of more than 1.85 lakh people, while helping smartphones emerge as India’s top exported commodity in calendar year 2025. These figures matter because value addition is the real test of industrial depth. A country can assemble devices at scale and still remain dependent on imported inputs, but a rise in domestic value addition suggests that more of the supply chain is beginning to take root within the country itself. That means greater participation by Indian firms in components, sub-assemblies, tooling, and allied manufacturing segments, which in turn reduces vulnerability to external supply disruptions.

The strategic significance of this development is larger than the headline percentage. Electronics is no longer just an industrial category; it is the backbone of consumer technology, telecom networks, industrial automation, digital infrastructure, and increasingly, strategic sectors such as defence electronics, semiconductors, and advanced manufacturing. When domestic value addition rises, the country does not merely earn more from each unit produced; it also builds know-how, supplier capability, workforce skills, and industrial resilience. That is why the jump to the 18%–20% band is important. It suggests India’s localisation push is beginning to move from policy intent to measurable industrial outcome. The road ahead remains long, because the most advanced layers of the electronics value chain still require deeper capability in semiconductors, precision components, materials, and capital equipment. But the direction is unmistakable: India is trying to shift from being an assembly destination to becoming a broader manufacturing and technology ecosystem.

In practical terms, this is what will determine whether India can sustain its ambition of becoming a global electronics and semiconductor hub. High production numbers are impressive, and export growth is politically valuable, but the long-term strength of the sector will depend on how much of that value stays within the domestic economy. The reported increase in value addition is therefore one of the most meaningful indicators in the sector today. It shows that localisation is not just a slogan attached to industrial policy, but a process that is beginning to reshape the structure of manufacturing itself. If India can continue this trajectory by expanding component ecosystems, improving logistics, scaling semiconductor capability, and tightening links between policy incentives and domestic supply creation, electronics manufacturing could become one of the defining pillars of the country’s broader industrial rise.

Reference:

IBEF
https://www.ibef.org/news/domestic-value-addition-in-electronics-manufacturing-rises-to-18-20-strengthening-india-s-localisation-push