Accelerated worldwide demand and expanding domestic production capabilities are driving India’s electronics industry. The country intends to create US$300 billion worth of electronics by the fiscal year 2026, which will increase demand for semiconductors valued between US$90 and US$100 billion, creating a window of opportunity for local producers.
In the fiscal year 2023–24, electronics exports from the country surpassed the US$20 billion mark, demonstrating the country’s increasing competitiveness and potential in the global economy.
This accomplishment opens the door for additional research into export prospects while showcasing India’s expertise in electronics production. India’s exports of electronic goods rose from INR 200.97 billion (US$2.41) in January 2024 to INR 248.72 billion (US$2.99 billion) in the following month.
The annual export value of top-performing industries, such as engineering goods, electronics goods, and pharmaceuticals and drugs, increased in FY24, a year in which geopolitical tensions drove up energy prices and high interest rates worldwide reduced demand.
Electronic goods exported from India
As per the latest research conducted by a global research agency, the electronics industry in the domestic market is predicted to develop at the highest pace among all segments. India’s export value is estimated to nearly triple to US$835 billion by 2030, from US$431 in 2023, with a compound annual growth rate of 24 percent. Exports of electronics is anticipated to rise from US$28 billion in 2023 to US$61 billion in 2030, a more than twofold increase.
Companies based in the US make up the majority of investors in India, particularly in the electronics industry. In East Asia, Japan and Korea are also making investments in India’s electronics, automotive, and consumer durable industries to capitalize on the country’s expanding domestic market and employ it as a base for production.
India is a global exporter of a broad variety of electronic items. The following are a few of the main electronics that India exports:
- Mobile Phones: India is the world’s second-largest manufacturer of mobile phones.
- Computer Hardware: India exports a sizable quantity of computer hardware, such as motherboards, CPUs, and laptops.
- Consumer Electronics: Televisions, refrigerators, and washing machines are just a few of the items that the nation exports in large quantities.
- Electronic Components: India exports components including resistors, capacitors, and semiconductors.
- Medical Electronics: The country exports medical equipment such as blood glucose monitors, X-ray machines, and ultrasound machines.
India’s electronics sector is expanding quickly, propelled by big objectives and a calculated plan to take the lead globally. With a strong emphasis on exports, India hopes to produce an astounding US$300 billion worth of electronics, backed by different central government policies and schemes.
Accelerating the growth of electronics sectors
Within nine months of the 2023–24 fiscal year, electronics exports from India surpassed $20 billion, demonstrating the country’s increasing competitiveness and potential in the global economy. This accomplishment opens the door for additional investigation into export prospects while showcasing India’s expertise in electronics production.
The rise in electronics exports boosts India’s economy by substantially increasing foreign exchange inflows. The sector’s involvement in India’s growing trajectory is highlighted by the importance of electronics exports as the country works towards its aim of ranking among the top global economies.
India’s two largest export markets for electrical goods are the United States and the United Arab Emirates. In FY24, about one-third of India’s US$8.7 billion in electronic goods exports went to the United States in February. The UAE came in second at US$3 billion (12 percent). The United Kingdom and the Netherlands each had a stake of roughly five percent.
Emerging states for electronic exports from India
In April 2024, it was announced that Tamil Nadu, in southern India, had become the country’s top exporter of electronic goods in FY23, making about thirty percent of all exports from the state in FY24. Till FY22, states like Karnataka and Uttar Pradesh dominated the export of electronic goods from India.
According to statistics, Kancheepuram, a district in northeastern Tamil Nadu, was the source of about 40 percent of cellphones sent to India during the last two fiscal years. The majority of these electronic products, which were primarily mobile phones, were exported to the US, the UAE, and the Netherlands.
Tamil Nadu exported electronic items valued at over US$7.4 billion between April 2023 and January 2024—nearly four times its FY22 volume.
Policy intervention to boost electronic goods production and exports
Keeping in view India’s year-on-year performance of electronic goods exports, the central government announced its National Policy for Electronics (NPE) in 2019. NPE was founded to turn the country into a comprehensive hub for Electronics System Design and Manufacturing (ESDM) by fostering an environment that allows the industry to compete with its global counterparts. Furthermore, the ESDM sector is one of the top 25 priority industries in the government’s Made in India initiative, making it a crucial engine of economic expansion.
So far, India has several national-level schemes in place for electronics, namely the Production-Linked Incentive Scheme (PLI), the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), and the Modified Electronics Manufacturing Clusters Scheme (EMC 2.0). These three schemes were notified in April 2020. A fourth scheme, namely the Production-Linked Incentive Scheme (PLI) for IT Hardware, was notified in March 2021.
Global challenges threaten India’s export performance
Think tank Global Trade Research Initiative (GTRI) said in a report, that global events had an impact on India’s trade performance in 2024. Some of the primary factors, such as the EU’s proposed carbon tax and forest regulations; the ongoing Russia-Ukraine war; the costlier crude oil due to the tensions in US-China trade; and the Houthi attacks on ships in the Red Sea, have resulted in increased freight and disruptions to supply chains.
Experts anticipate further growth in industries such as electronics, mobile manufacturing, medicines, and drugs; however, there is a growing fear of protectionism among developed economies. The emerging economies are attempting to solidify their manufacturing foundation, thereby aiming to reduce component import dependency from India. This may result in increased tariffs. Countries such as Vietnam and Malaysia have created a robust industrial policy to address labor standards and supply chain due diligence laws, thereby creating tougher competition for India’s electronics exports.
Key Takeaways
- India’s month-on-month growth in exports of electronic goods rose to INR 248.72 billion (US$2.99 billion) in February 2024. Over the course of nine months in FY2023–24, the sector’s exports have reportedly surpassed US$20 billion.
- FY24 has been positive for India’s overall export size; experts have stated that the country’s electronics exports are expected to rise to US$61 billion in 2030.
- International markets, such as US-based companies, are increasingly investing in India’s electronics industry. Meanwhile, Japan and Korea are also investing in India’s electronics, automotive, and consumer durable industries.
- Export data indicates that the US and UAE are two of the largest markets for Indian electronic goods, with significant exports also going to the UK and the Netherlands.
- Recent global events have impacted India’s trade numbers in recent months; however, it is believed that the demand for electronic goods, such as semiconductor chips, from international players will continue to benefit the country.
