India’s prowess in the global electronics sector is on a remarkable rise, fueled by Prime Minister Narendra Modi’s ambitious vision to transform the country into a $500 billion electronics manufacturing hub by 2030. This bold goal aims to revolutionize the industry, positioning India as a global leader in electronics production. The Ministry of Electronics and Information Technology’s (MeitY) revamped National Policy on Electronics (NPE) 2019 focuses on domestic value addition and establishing world-class Indian brands to support this transformation. At the same time, the Production Linked Incentive (PLI) Scheme, with an unprecedented ₹1.97 lakh crore in investments allocated across 14 key sectors, including electronics, plays a pivotal role in incentivizing incremental sales of locally manufactured products. Complemented by visionary initiatives such as Make in India and Digital India, these efforts have significantly enhanced domestic manufacturing capabilities and boosted exports across the Electronics System Design and Manufacturing (ESDM) value chain.
Projections indicate an impressive annual growth rate of 25%-30% for the electronics sector by 2030, making it one of the fastest-growing industries globally. In FY23, India’s electronics production reached USD 101 billion, segmented into USD 86 billion from finished goods and USD 15 billion from components manufacturing. Exports during the same period totaled approximately USD 25 billion, reflecting India’s growing influence in the global electronics market. Domestic production, valued at USD 101 billion in FY23, is further broken down by sector: Mobile Phones (43%), IT Hardware (5%), Consumer Electronics (12%), Strategic Electronics (5%), Industrial Electronics (12%), Wearables & Hearables (0.3%), PCBA (0.7%), Auto Electronics (8%), LED Lighting (3%), and Electronic Components (11%). While these sectors are expanding, the most in-demand areas include semiconductors, electronic components, and electronics system design. TeamLease Degree Apprenticeship, we recently launched an exclusive report, People Supply Chain Innovation With ROI: Empowering India’s Electronics Sector, which dives deep into addressing the skills gap and workforce strategies crucial for the sector’s sustained growth. Our projections indicate that by FY 2027-28, the electronics sector will employ approximately 12 million people in direct and indirect roles; however, it will face a substantial workforce shortfall of 8 million and a skills gap affecting an additional 10 million. Despite the progress, India’s electronics market accounts for only 4% of the global sector, though it is projected to reach 6% by 2030, underscoring both the challenges and opportunities that lie ahead.
Opportunities and Challenges in India’s Electronics Sector
India’s share in the global electronics value chain remains minimal, currently less than 1%, with annual exports amounting to USD 25 billion. However, the domestic electronics production landscape has seen remarkable growth, nearly doubling from USD 48 billion in FY17 to USD 101 billion in FY23. This surge is primarily driven by the mobile phone segment, which accounts for 43% of the total production. Despite advancements in final assembly and sub-assembly, India continues to depend heavily on imports for critical components and design capabilities across various sectors, highlighting the need for a more self-reliant ecosystem.
Growth Opportunities
India’s electronics market offers significant growth opportunities, catalyzed by several key developments:
- The expansion of global giants like Apple, Google, and Foxconn, which not only accelerates domestic production but also creates an attractive environment for other international players.
- The “China + 1” strategy, which encourages global manufacturers to diversify supply chains, positions India as a viable alternative manufacturing base amidst rising costs and geopolitical tensions in China.
- The transition from traditional contract manufacturing to Original Design Manufacturing (ODM) models allows Indian firms to deliver greater innovation and customization, appealing to OEMs seeking tailored and technology-driven solutions.
Challenges Ahead
Despite its progress, India’s electronics sector faces several pressing challenges:
- Heavy reliance on imports from countries like China, South Korea, and Vietnam for essential components drives up production costs and increases vulnerability to supply chain disruptions.
- Competing with established EMS players in China, which benefit from economies of scale and advanced infrastructure, remains a significant hurdle for Indian manufacturers.
- The skills gap in advanced manufacturing and design functions hinders the sector’s growth, necessitating targeted investments in education, training, and workforce development.
- Building a robust domestic manufacturing ecosystem, encompassing everything from raw material sourcing to the production of finished goods, is crucial for India’s long-term success in the global market.
With the growing opportunities, the electronics sector must capitalize on advancements by enhancing operational efficiency, investing in skill development, and adopting automation to sustain its competitiveness in the global market.
Bridging the Skill Gap: A Critical Priority for the Electronics Sector
The skill gap in India’s electronics industry has emerged as a critical challenge, reflecting a stark mismatch between workforce capabilities and the evolving demands of the sector. With the industry advancing into high-tech domains like Artificial Intelligence (AI), the Internet of Things (IoT), and Industry 4.0 technologies, the shortage of specialized technical expertise has become more pronounced. Core areas such as manufacturing, electronics design, and technical troubleshooting are particularly impacted, where advanced skills are vital for driving innovation and maintaining operational efficiency. While job opportunities are on the rise, companies continue to struggle with filling critical roles, underlining the urgent need for targeted training and workforce development initiatives. Projections indicate that by FY 2027-28, the electronics sector will employ approximately 12 million people in direct and indirect roles; however, it will face a workforce shortfall of 8 million and a skills gap affecting an additional 10 million individuals.
Several factors contribute to this widening skill gap. A key driver is the misalignment between educational outcomes and industry needs, as many academic programs have not kept pace with rapid technological advancements in the electronics sector. This leaves graduates lacking the practical skills required for high-tech roles. Furthermore, the insufficient supply of specialized technical talent, particularly in areas like AI, semiconductor design, and automation, exacerbates the shortage of skilled workers. As the industry evolves, new roles are emerging in semiconductor fabrication, component manufacturing, automation, sustainability, and smart manufacturing, demanding a workforce that is both skilled and adaptable. High-demand positions such as Semiconductor Process Engineers, PCB Designers, Robotics Engineers, and IoT Integration Specialists highlight the need for advanced technical expertise. Sustainability-focused roles, including Green Manufacturing Consultants and Environmental Compliance Officers, reflect the industry’s growing emphasis on eco-friendly practices and regulatory compliance.
To bridge this gap, a multi-faceted approach is essential, with an immediate focus on upskilling and reskilling through structured apprenticeship programs, targeted training, and stronger collaborations between academia and industry. These efforts are critical to equipping the workforce with the practical skills and adaptability needed to meet the growing and complex demands of the electronics sector.
Role of Upskilling, Reskilling, Apprenticeships and Work-Integrated Learning Programs
To meet the growing demand for skilled talent in the electronics sector, we suggest doubling the apprenticeship growth rate, as apprenticeships are instrumental in creating a steady pipeline of job-ready professionals. The current ecosystem, which is growing at a robust 55% CAGR and projected to reach 1 million apprentices needs to double and expand to 2 million so that the sector can effectively address both immediate workforce needs and future demands. Furthermore, large-scale reskilling and upskilling programs are crucial and need to cover over 50% of the existing workforce. These initiatives will ensure workers are equipped with advanced skills to adapt to rapid industry shifts and emerging technological advancements.
Equally important is strengthening industry-academia collaboration to meet the rising demand for employable graduates. Currently, 2 million graduates are expected to enter the workforce annually by FY 2027-28. This number must be doubled to 4 million to sustain the pace of growth of the electronics industry. Leveraging frameworks like the National Education Policy’s Apprenticeship Embedded Degree Programs (AEDP) will help align academic curricula with industry requirements by embedding hands-on apprenticeships within degree structures, bridging the education-to-employment gap. Additionally, we propose doubling the seat capacity in Industrial Training Institutes (ITIs) from the current 48% to accommodate more students in core technical fields. This expansion will bolster the talent pipeline and strengthen foundational skills essential for the electronics sector. Together, these measures create a comprehensive strategy to build a sustainable, future-ready workforce capable of driving continued growth in the electronics industry.
References:
