This would mean a strong compound annual growth rate (CAGR) of 27 per cent over the next five-year period from FY23 to FY28.
The report said “The Indian EMS sector is experiencing multi-year growth opportunities aided by supportive government policies and strong demand tailwinds emerging from the use of electronics in multiple sectors. Domestic electronic production is expected to grow at a CAGR of 27 per cent over FY23-28.”
It highlighted that electronics are increasingly being used in many sectors, leading to a strong domestic demand that Electronics Manufacturing Services (EMS) companies can tap into. In addition to this, global companies are also looking at India as a cost-effective and reliable alternative to China.
The total electronic market (domestic production + import of electronic products) in India is expected to grow at 21.5 per cent CAGR to touch Rs 28.8 lakh crore by FY28 from Rs 10.8 lakh crore in FY23.
The Indian electronic consumption market is expected to touch Rs 17.9 lakh crore by FY28, with a CAGR of 14.6 per cent from Rs 9.1 lakh crore in FY23.
Exports too are expected to grow at a CAGR of 43.9 per cent over FY23-28, reaching Rs 10.8 lakh crore whereas imports are expected to de-grow from Rs 2.4 lakh crore to Rs 1 lakh crore over FY24-28.
India is not just seen as a low-cost manufacturing destination but is also gaining recognition for high-quality design work. Many multinational companies have already set up or expanded their operations in India.
In FY23, domestic electronic production in India was valued at Rs 8.4 lakh crore, and this is expected to grow rapidly in the coming years.
The report noted that the COVID-19 pandemic exposed weaknesses in global supply chains, pushing the Indian government to take steps toward self-reliance.
As part of this effort, the government introduced various incentive schemes, including the Production Linked Incentive (PLI) scheme, to attract global players and promote manufacturing within the country.
Globally, per capita electronic consumption is USD 324, but in India, it is only USD 78.
These initiatives have helped bring in significant investments and encouraged companies to set up manufacturing bases in India.
India has certain key advantages such as a young population, low-cost skilled labour, frugal engineering skills, and strong design capabilities. These factors are helping the country build a strong and competitive electronics manufacturing ecosystem.
The report also mentioned that India has a competitive edge in design services. While most of this work was earlier outsourced to countries like China, South Korea, and Thailand, India is now catching up.
Many EMS providers in India are gradually moving from just contract manufacturing to offering complete design services as well. This not only helps them grow but also brings in higher profit margins.
Overall, India is well-positioned to become a major hub for electronics manufacturing and design in the coming years.
