Electronics Manufacturing Services: Where India Stands

The growth of the electronics manufacturing services (EMS) industry is crucial for kickstarting the ‘Make in India’ programme. The more developed the domestic EMS industry is, the faster and easier it will be for large original equipment manufacturers (OEMs) to set up operations here. Here is a sneak peek into the Indian EMS industry.

The Indian electronics system design and manufacturing (ESDM) industry is on track to achieve its full potential in terms of manufacturing and design capabilities. One significant milestone in establishing India as a global manufacturing hub was that for the first time, India’s domestic electronics production exceeded imports in 2016-17. According to government sources, the domestic production of electronic goods for 2016–17 stood at US$ 49.5 billion, higher than the US$ 43 billion spent on imports. This indicates that the ‘Make in India’ initiative is beginning to have a positive impact on domestic manufacturing. Favourable business policies for the domestic electronics sector have undoubtedly played their part, particularly in facilitating the setting up of manufacturing facilities for smartphones, set-top boxes, televisions and other appliances.

There are many local brands operating under the ‘Make in India’ initiative as well as global manufacturers looking to relocate their manufacturing bases from China (due to mounting labour costs in that country) to alternate locations such as India, Vietnam and Indonesia. So both global as well as domestic electronics manufacturers are showing renewed interest in India, now viewing it as a manufacturing destination.

This offers enormous opportunities for the Indian EMS sector. Over the next five years, accelerated local manufacturing of electronic products to cater to the growing domestic demand will drive the EMS sector in India.

Opportunities galore

The EMS market in India will be highly dynamic in the coming year. The country is all set to emerge as a hot spot for electronics manufacturing among the South Asian nations, owing to advantages such as low operating costs.

Survey participants indicate that the top three growth-driving application sectors (Figure 1) that will need EMS providers will be: