India's Electronics Sector Must Ascend the Value Curve

We Should Charge Ahead with Ambitions of Sophisticated Manufacturing. This Will Yield Far Greater Gains

- PRASANNA KARTHIK

India's smartphone exports stood at $10.96 billion in 2022-23 and surged to $24.14 billion in 2024-25, a striking compound annual growth rate (CAGR) of 48.4%. Long reliant on imports and peripheral to global value chains, India's electronics manufacturing is becoming a pillar for job creation, export growth, and technological advancement. However, India must temper its excitement about labor-led electronics manufacturing growth and double down on boosting domestic value addition.

The 'China plus one' strategy, accelerated by the pandemic and heightened US-China tensions, has led to supply chain diversification by global manufacturers. Among alternatives, India stands out thanks to its vast domestic market, improving infrastructure, and large labor supply. India is the world's second-largest mobile phone making hub now, a status that reflects both expanding production and rising quality standards. It is also well-placed to further capitalize on the 'friend-shoring' trend born of geopolitics.

At the heart of our manufacturing drive is the government's production-linked incentive (PLI) scheme, which has attracted significant investments from global players. Apple, for instance, now assembles 10-12% of all iPhones in India. In 2024-25, iPhone exports amounted to $17.4 billion. Samsung runs the world's largest mobile phone factory in Noida, catering to both domestic and international markets.