India’s Electronic Manufacturing Services (EMS) sector is at a critical growth juncture, with the potential to transform from a large-scale assembly hub into a globally competitive, integrated manufacturing powerhouse, according to a new report released by KPMG in India.
Titled “India’s Electronic Manufacturing Services (EMS) Opportunity: From Assembly Hub to Integrated Manufacturing Powerhouse,” the report highlights how the ongoing restructuring of global electronics supply chains—driven by geopolitical shifts, resilience priorities and increasing technological complexity—is creating a significant opportunity for India.
The report notes that India’s EMS market has expanded rapidly from approximately USD 10–12 billion in FY20 to nearly USD 40–45 billion in FY25 and is projected to surpass USD 150 billion by FY30. This growth is being fuelled by strong domestic demand, supportive government policies and the global “China+1” sourcing strategy.
However, despite this impressive expansion, India faces what the report describes as a “scale without depth” challenge. While the country has emerged as a leading destination for high-volume assembly, particularly in mobile phones and consumer electronics, its presence in higher-value segments such as component manufacturing, product design and intellectual property ownership remains limited.
According to the report, value creation rises significantly as manufacturers move up the value chain from assembly operations to design-led and system-level capabilities. Building expertise in engineering, supply chain management and product development will therefore be essential for sustaining long-term growth.
The study also points to continued dependence on imported components, with import reliance ranging from 80 to 95 per cent across several critical categories. This limits domestic value addition and profitability, underscoring the need to strengthen local component ecosystems as policy incentives gradually taper off.
India currently accounts for around 5–6 per cent of global EMS manufacturing, suggesting substantial room for expansion. The global EMS market, estimated at USD 640–650 billion in 2025, is expected to exceed USD 1 trillion by the early 2030s, driven by increasing connectivity, electrification trends and greater outsourcing by original equipment manufacturers (OEMs).
The report emphasizes that while consumer electronics will continue to drive scale, long-term value creation will increasingly come from higher-complexity sectors such as automotive, industrial electronics, aerospace and defence, where engineering expertise, certification standards and precision manufacturing provide sustainable competitive advantages.
“India’s EMS sector has reached a pivotal moment where the foundations of scale are firmly in place, but the next phase of growth will be defined by depth,” said Rohan Rao. He noted that global supply chains are shifting towards resilient, multi-node manufacturing networks, presenting India with a time-sensitive opportunity to move beyond assembly-led growth and build integrated, design-driven capabilities.
Echoing this view, Raghavan Viswanathan said the future trajectory of the sector will depend not only on capacity expansion but also on strategic choices regarding market segments and capability development. He stressed that the transition from capacity-led growth to capability-led growth will be vital for India’s emergence as a globally competitive electronics manufacturing hub.
The report highlights that government policy support has been a major catalyst, with cumulative incentives of nearly USD 19.5 billion aimed at strengthening the electronics manufacturing ecosystem. Going forward, sustained competitiveness will depend on greater localisation, deeper certification capabilities, stronger engineering and design integration, and enhanced supply-chain sophistication.
KPMG concludes that the next five to ten years will be decisive for India’s EMS industry. Realising its full potential will require coordinated efforts from the government, EMS companies and global OEMs to develop component ecosystems, build workforce capabilities and deepen value-chain integration, enabling India to evolve into a leading global electronics manufacturing destination.
