India's electronic manufacturing services market to reach $72.2 billion by FY27

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India's electronic manufacturing services market to reach $72.2 billion by FY27

India's electronic manufacturing services market to reach $72.2 billion by FY27

Industry News
Aug 21,24

Government initiatives such as production-linked incentive (PLI) schemes and the Semicon India programme are driving this growth.

India's electronic manufacturing services market to reach $72.2 billion by FY27

The domestic electronic manufacturing services (EMS) market in India is projected to grow at a robust 32% compound annual growth rate (CAGR) from FY22 to FY27, reaching $72.2 billion by the end of this period, according to a recent report. This represents a significant increase from $17.5 billion in FY22.

Government initiatives such as production-linked incentive (PLI) schemes and the Semicon India programme are driving this growth. The government has also reopened the PLI scheme for white goods to attract further investment in domestic appliances.

The report by Motilal Oswal Financial Services highlights that while the growth in electronic manufacturing is strong, component manufacturing has lagged. This sector requires substantial initial capital expenditure and has a longer gestation period. Therefore, additional government measures are needed to support component manufacturing in India.

Niti Aayog has proposed several strategies to enhance component manufacturing and integrate India into global electronics value chains. These include fiscal incentives, R&D support, tariff simplification, infrastructure improvements, and technology transfer initiatives.

Companies like Dixon Technologies and Amber Enterprises have established leadership in the EMS sector and are focusing on expanding their market presence and backward integration. With increased government support, India's electronics production has grown from $48 billion in FY17 to $101 billion in FY23.

The country's electronic manufacturing capacity is expected to reach $500 billion by FY2030, comprising $350 billion in finished goods and $150 billion in components, signifying a major investment in the component ecosystem.

India hosts prominent players in the electronics value chain, including Foxconn, Dixon, Amber, Pegatron, Apple, Samsung, BoAt, and Atomberg.

(ET)