India pushes design-led electronics shift

Teji Mandi (TM Investment Technologies Pvt Ltd) is a SEBI registered Research Analyst . The above report is for educational and informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investments in the securities market are subject to market risks. Read all related documents carefully before investing.

India’s electronics manufacturing sector is undergoing a strategic transformation, moving beyond assembly-led growth towards deeper value addition driven by design and engineering capabilities. The government’s approval of 29 new proposals under the Electronics Component Manufacturing Scheme (ECMS), involving investments of ₹7,104 crore, marks a significant step in this direction. With these approvals, the total number of projects under ECMS has risen to 75, attracting cumulative investments of ₹61,671 crore—already surpassing the initial target. These projects span a wide range of components, including display modules, capacitors, connectors, flexible PCBs, and rare earth magnets, signalling a broad-based push to strengthen India’s electronics ecosystem. 

Design-led growth

A key shift in policy is the government’s emphasis on “Design in India.” Union Minister Ashwini Vaishnaw has made it clear that subsidies will be tied to design, quality, and engineering capabilities rather than mere manufacturing. This marks a departure from earlier production-linked strategies focused primarily on scale. The move aims to ensure that higher-value activities—such as product design and innovation—are retained within the country. The scheme also prioritises building a domestic supply chain and improving quality standards through initiatives such as Six Sigma programmes and workforce training. Plans to establish multiple training centres, each with a capacity to train thousands of workers, highlight the government’s intent to address skill gaps alongside industrial expansion. 

Industry implications

Corporate participation further underscores the momentum. Companies such as Dixon Display Technologies are setting up large-scale facilities, including a ₹1,100 crore display plant with significant production capacity. Such investments are expected to increase local value addition in segments like mobile phone manufacturing from around 18% to nearly 40%, reducing reliance on imports. 

For investors, this transition presents a structural opportunity. The focus on advanced components, domestic supply chains, and capital equipment could unlock long-term value, particularly for firms that invest in design and innovation. However, companies that remain dependent on assembly may face reduced incentives and competitive pressure.

Looking ahead, the government’s ambition to scale the electronics industry to $500 billion by 2031 hinges on successful execution of such initiatives. In a global environment marked by supply chain disruptions, India’s push for self-reliance and design-led growth could position it as a key player in the global electronics landscape.