New Delhi, Sep 9: India’s growing electronics manufacturing industry continues to depend heavily on China for several critical components, highlighting the need for a more targeted approach to domestic manufacturing and localisation, according to an industry report.
India has made significant progress in expanding its electronics production and exports in recent years. However, the development of a complete domestic supply chain remains a challenge, particularly for core components that require advanced technology, specialised manufacturing capabilities and large-scale investments.
The report said reducing import dependence cannot be achieved simply by increasing final assembly in India. Greater attention is needed on developing the component ecosystem, including electronics parts, semiconductors, sub-assemblies and other critical inputs used by manufacturers.
For businesses, this dependence creates risks related to supply disruptions, global commodity prices, logistics costs and geopolitical developments. A stronger domestic component base could help manufacturers secure supplies, improve production planning and retain a larger share of value within India.
The need for localisation is becoming more important as global companies diversify their supply chains and India seeks to establish itself as a major electronics manufacturing hub. Industry assessments have also highlighted the importance of building capabilities across the wider electronics value chain rather than focusing only on final-product manufacturing.
A targeted localisation strategy could focus on components where India has strong demand but limited domestic production. Such an approach would allow government incentives and private investment to be directed towards areas with the greatest potential to reduce import dependence and strengthen industrial capacity.
Developing local suppliers could also create opportunities for Indian small and medium-sized manufacturers. A deeper component ecosystem would allow domestic companies to participate more extensively in global electronics supply chains while creating skilled jobs and supporting technology development.
At the same time, localisation will need to remain commercially viable. Manufacturers will consider cost, quality, scale, technology and reliability before shifting from established overseas suppliers. This makes investment in modern production facilities, research and development, skilled manpower and supply-chain infrastructure important for long-term competitiveness.
Recent trends show that electronics manufacturers are already looking at greater local sourcing as they face higher input costs and changing global supply-chain conditions.
India’s electronics opportunity therefore extends beyond assembling smartphones, appliances and other finished products. Building capabilities in high-value components could help the country move further up the manufacturing value chain and strengthen its position in global electronics production.
A stronger domestic component industry would also make the sector more resilient to external disruptions. With electronics becoming increasingly important to consumer products, automobiles, telecommunications, industrial equipment and emerging technologies, reliable access to critical components will remain an important factor for India’s manufacturing growth.
The focus on targeted localisation is ultimately about building a competitive ecosystem rather than eliminating imports completely. By developing domestic capabilities in strategically important components while remaining integrated with global supply chains, India can create a more resilient and globally competitive electronics manufacturing sector.