India’s electronics boom could reach $500 billion, rivalling IT by 2030
Faster growth, policy support, and rising local manufacturing are positioning India’s electronics sector to match IT services in revenue and opportunity by the end of the decade.
NEW DELHI: Driven by aggressive policy support and a global realignment of supply chains, India’s electronics manufacturing industry is set to grow nearly three times faster than the country’s flagship IT services sector and draw level with it in terms of revenues over the next five years, a top government official said.
“Our goal is to enable both the industries to grow quite rapidly, so that by 2030, India will generate $1 trillion in revenue from the digital economy—with electronics and IT both contributing about $500 billion each by the end of this decade," S. Krishnan, secretary at the ministry of electronics and information technology (Meity), said in an interview with Mint.
Back-of-the-envelope calculations show that through 2030, electronics manufacturing will have to grow at a CAGR (compounded annual growth rate) of 32% to reach that goal. The IT services industry is projected to grow at a more sedate 12% over the same period.
Last year, the electronics sector ended with $125 billion in revenue, while IT services recorded $283 billion.
To be sure, electronics manufacturing — despite extensive government support — remains a smaller, lower-margin industry than IT services, dominated by companies with thinner profits, employing fewer people and paying lower average wages.
Electronics gains momentum
The electronics industry received a boost after the government began providing financial assistance in April 2020 for assembling mobile phones and other electronic goods.
Since then, the sector has spawned over half a dozen listed firms, a dozen private companies, and a few foreign players, including Taiwanese giant Foxconn, which have either set up new units or expanded existing ones to assemble imported components.
Four of the largest listed electronic component makers—Dixon Technologies, Amber Enterprises, Kaynes Technology, and Syrma SGS—reported $6.1 billion in revenue last fiscal. Privately held Tata Electronics ended with $7.4 billion in revenue, according to data from the FY25 annual report of Tata Sons.
“India is now among the most favoured destinations across the world for the global electronics supply chain, from a geopolitical standpoint," said Ankush Wadhera, managing director and partner at consultancy firm, Boston Consulting Group. “With recent tailwinds provided by attractive policy support and swift decision-making both by the Centre and states alike, several companies are asking internally what their India strategy should be, and how they should look to diversify beyond facilities in China, Taiwan, Malaysia, Thailand and Vietnam."
“Further, with Meity’s ECMS (Electronics Components Manufacturing Scheme) initiative, the Centre is now offering incentives to manufacture electronics components locally, and large global firms are likely to ramp up manufacturing in India. This will increase revenue substantially in the long run—as a natural recourse to the slowdown that IT services may see in the future due to AI-led automation," Wadhera added.
Employment, margins, and the road ahead
Despite the growth, electronics players remain smaller than IT firms. The IT industry employs 5.8 million people, while the electronics sector has 2.5 million. Salaries also lag: Data sourced by Mint from employment services firm Xpheno showed electronics engineers earn an average ₹1.8 lakh per year, compared with ₹3.5 lakh in IT services.
Margins are wafer thin. Tata Electronics, which posted ₹66,601 crore in revenue, ended with ₹69 crore in losses. In contrast, Tata Consultancy Services (TCS), the crown jewel of the Tata Group, generated free cash flow of ₹46,450 crore on revenue of ₹2.55 trillion in FY25.
Things may improve as Meity’s ECMS, implemented through 2025, encourages local production of individual phone and computer components. This initiative will enable Tata Electronics, Foxconn, Dixon, and others to move up the value chain—employ more engineers, and eventually offer higher-paid positions.
“We should be clear that electronics manufacturing factory jobs are low salary vis-a-vis other tech factories where the sophistication of jobs is high," Krishnan said. “They will eventually come to India, too, but that will take some time as the industry matures.
At the same time, Krishnan pointed out that electronics jobs are not low salary vis-a-vis employment in agriculture. “The wages being offered right now are market-clearing wages—the workers are given housing, due employee protection, and in an opportunity that did not exist before," he added.
Ajai Chowdhry, co-founder of HCL and founder of electronics industry body Epic Foundation, said India should channel government incentives into local industrial champions to reduce dependency on cross-border relations.
“We are seeing electronics continue to grow across the board thanks to great support from the Centre in components and semiconductors," he added. “Electronics will also be a key employment generator, but that is not to say that software services firms are passé—they're going through a small blip, but we're seeing captive centres continue to uphold the sector, which should help it grow at a steady scale."
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