In electronics, deeper localisation is the key for value creation: Mukesh Vasani

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In electronics, deeper localisation is the key for value creation: Mukesh Vasani

In electronics, deeper localisation is the key for value creation: Mukesh Vasani

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Feb 25,26

In this interview, Mukesh Vasani, Chairman & MD, Aimtron Electronics, emphasises that long-term consistency, capital support and ecosystem development are essential to building a resilient, export-driven electronics hub

In electronics, deeper localisation is the key for value creation: Mukesh Vasani

India’s electronics industry is at an inflection point, transitioning from assembly-led growth to deeper component manufacturing and system-level integration. Policy momentum, localisation and indigenous design capabilities will determine whether the country can move up the global value chain sustainably. In this interview, Mukesh Vasani, Chairman & Managing Director, Aimtron Electronics, emphasises that long-term consistency, capital support and ecosystem development are essential to building a resilient, export-driven electronics hub.

India’s electronics sector has expanded rapidly in assembly and exports. How would you evaluate the industry’s current depth of value addition and overall maturity?

India’s electronics industry has made impressive strides in scale and speed, especially in finished goods assembly and exports. However, in terms of depth of value addition, the ecosystem is still at an early-to-mid maturity stage. A large portion of value today continues to reside in imported components, sub-assemblies and materials.

That said, this phase should be viewed as a natural inflection point rather than a limitation. Historically, every major electronics hub from China to Taiwan first scaled assembly before moving decisively into components, design and materials. India is now entering that transition phase. Aimtron, which operate across electronics manufacturing services with a growing focus on system-level integration and component localisation, are already positioning themselves for this next leg. Deeper localisation in printed circuit boards, passive components, electromechanical parts and advanced assemblies will be critical for sustainable value creation.

How pivotal is the Electronics Components Manufacturing Scheme (ECMS) in enabling India to integrate more deeply into global electronics and semiconductor supply chains?

ECMS is absolutely critical. If PLI created the demand pull for manufacturing in India, ECMS is the supply-side backbone that can complete the ecosystem. Without a strong domestic components base, India risks remaining an assembly destination rather than a strategic node in global supply chains.

From an industry standpoint and particularly for companies like Aimtron, which work closely with global and domestic OEMs, ECMS directly addresses the missing middle of the value chain: components, sub-systems and materials. These are precisely the capabilities global customers evaluate when deciding long-term sourcing and manufacturing partnerships. In that sense, ECMS is not merely an incentive scheme; it is a strategic enabler for India’s credibility as an end-to-end electronics manufacturing destination.

How transformative can component localisation be in enhancing India’s cost competitiveness, supply-chain resilience and export potential?

Component localisation can be transformational. First, it significantly improves cost competitiveness by reducing logistics costs, import duties, currency volatility and lead times. Second, it enhances supply-chain resilience, which has become a boardroom priority globally following geopolitical disruptions and the pandemic.

For export-oriented EMS players like Aimtron, localisation is also a prerequisite for scale. You cannot build a robust export-led electronics business if critical inputs are predominantly imported. As global companies actively diversify away from single-country dependence, India has a rare opportunity to position itself as a trusted alternative but that trust will only come with strong domestic component capabilities and reliable local supplier networks.

How effective have initiatives such as PLI and ECMS been in addressing structural challenges such as capital intensity, technology gaps and import dependence? What additional measures would strengthen the ecosystem?

The intent and direction of current policies are absolutely right. PLI has successfully demonstrated that scale can come to India quickly, while ECMS is a timely intervention to address capital intensity and encourage component manufacturing.

However, electronics components involve longer gestation periods, rapid technology obsolescence and deeper R&D investments than final assembly. From the perspective of execution-focused manufacturers like Aimtron, future policy support should increasingly focus on:

Access to affordable long-term capital
Support for tooling, testing and certification infrastructure
Stronger industry–academia collaboration for applied R&D
Faster clearances and stable policy visibility over a 7–10 year horizon

Electronics is not a short-cycle industry. Consistency and continuity will be just as important as incentives.

How critical are indigenous design capabilities, process excellence and skilled manpower in ensuring India moves beyond low-margin assembly to higher-value manufacturing?

They are absolutely central. Manufacturing without design and process ownership inevitably leads to margin compression. The real value in electronics lies in design-for-manufacturing, process optimisation, yield improvement and reliability engineering.

The increased focus on building indigenous design capabilities alongside manufacturing, allowing them to offer higher-value solutions rather than commoditised assembly. While India has a strong engineering talent base, faster alignment is needed between academic training and shop-floor realities—advanced manufacturing, automation, quality systems and materials science. Those who invest early in design ownership and process excellence will move up the value curve and build defensible global positions.

What is your five- to seven-year outlook for India’s electronics and component manufacturing landscape, and how do you see companies positioning themselves for long-term growth?

We are fundamentally optimistic. Over the next five to seven years, India will transition from an assembly-led electronics story to a more balanced ecosystem with meaningful component depth. While replicating the entire East Asian supply chain overnight may not be realistic, India can certainly emerge as a global hub for select component categories, advanced EMS and system-level integration.

We are thinking long-term, investing in technology, nurturing local supplier ecosystems and aligning with global quality benchmarks, will be well-positioned to lead this transformation. If policy momentum continues and industry executes with discipline, electronics could emerge as one of India’s most strategic manufacturing and export sectors of the next decade.