Boom: Opportunities for India’s Small and Mid-Sized Manufacturers
India’s electronics manufacturing industry is moving
into a new phase. After years of rapid growth in final assembly, the focus is
increasingly shifting towards components, sub-assemblies, materials, and
manufacturing equipment. This shift is also connected with the broader
development of global supply chains as manufacturers look to build stronger domestic sourcing networks.
The government’s Electronics Component Manufacturing
Scheme (ECMS) is supporting this transition. As of August 2026, 106 projects
had been approved across 15 states, involving ₹69,548 crore in approved
investment. The projects cover 30 electronic product categories and are
expected to strengthen domestic manufacturing and supply chains.
For small and mid-sized manufacturers, this shift could
create opportunities to become suppliers to larger electronics companies
instead of competing directly with them.
Why Electronics Components Are Becoming a Major Opportunity
India has built significant capacity in electronics
assembly, but many critical components and materials have historically been
imported.
The next stage of growth is therefore about increasing
domestic value addition. NITI Aayog has highlighted the need for India to move
beyond assembly towards component-led manufacturing, including areas such as
PCBs, semiconductors, battery management systems, and other higher-value
electronics capabilities.
This creates space for smaller manufacturers that can
provide specialised components, precision parts, materials, tooling, testing,
and supporting services.
Where Small and Mid-Sized Manufacturers Can Participate
The opportunity is not limited to semiconductor
fabrication or large-scale component plants. Several parts of the electronics
supply chain can be relevant for growing manufacturers.
PCB and Electronic Components
PCBs, passive components, connectors, inductors,
resistors, relays and other components are essential across smartphones,
automotive electronics, telecom equipment, consumer electronics and industrial
products.
The ECMS specifically covers several of these
categories, including multi-layer PCBs, flexible PCBs, passive components and
electro-mechanical components.
Supporting Materials and Sub-Components
Manufacturers can also participate upstream by
producing materials and sub-components required by larger electronics
manufacturers.
Recent ECMS approvals include laminates, metallised
films and rare-earth permanent magnets, showing that opportunities are emerging
beyond finished electronic components.
Contract and Supplier Manufacturing
Large electronics manufacturers often need a network of
reliable suppliers rather than producing every component internally.
This creates opportunities for MSMEs that can offer
consistent quality, competitive pricing, shorter lead times and specialised
manufacturing capabilities.
What Manufacturers Need to Prepare
Entering the electronics supply chain requires more
than simply adding a new product line. Buyers typically need suppliers that can
consistently meet technical, quality and delivery requirements.
Small and mid-sized manufacturers should focus on:
Quality systems: Build strong inspection,
testing and process-control capabilities.
Technical capabilities: Invest in precision
machinery, automation and relevant production technologies. precision machinery, automation
Certifications: Understand the certifications
and compliance requirements relevant to target customers.
Production consistency: Maintain repeatable
quality across large and small production batches.
Traceability: Maintain reliable records of
materials, processes and finished products.
Skilled employees: Develop capabilities in
electronics manufacturing, testing, quality and engineering.
Government policy is also placing greater emphasis on
domestic supply chains, quality programmes, design capabilities and workforce
development as India expands its electronics ecosystem. domestic supply chains
From Component Supplier to Strategic Partner
The biggest opportunity may come from moving beyond
being a basic component supplier.
Manufacturers that understand their customers’
production challenges can gradually become strategic partners by offering
customised components, engineering support, faster prototyping, quality
improvements or integrated sub-assemblies.
This can create stronger and longer-term business
relationships while helping MSMEs move towards higher-value manufacturing.
A Growing Window for Indian Manufacturers
India’s electronics production has expanded
significantly, while domestic value addition is also increasing. Government
data indicates electronics production reached approximately ₹12 lakh crore in
2024–25, compared with about ₹1.9 lakh crore in 2014–15.
The electronics component boom therefore represents
more than an opportunity for large corporations. It is also creating space for
small and mid-sized manufacturers to enter deeper layers of the supply chain.
India’s electronics
manufacturing story is gradually moving from assembly to value addition.
As more component plants, electronics manufacturers and global supply chains
develop within the country, demand for specialised domestic suppliers is likely to expand.
For MSMEs, the opportunity lies in identifying the right niche, strengthening manufacturing quality, investing in technology and building capabilities that larger electronics companies can rely on. The manufacturers that prepare early can position themselves within India’s growing electronics supply chain rather than remaining outside it.
FAQs
Indian MSMEs can participate in areas such as PCB manufacturing, passive components, connectors, electro-mechanical components, specialised materials, precision parts, tooling, testing, sub-assemblies and contract manufacturing. The opportunity depends on meeting the technical, quality and delivery requirements of larger electronics manufacturers.
Manufacturers generally need strong quality control, precision production capabilities, appropriate testing equipment, process traceability, relevant certifications and skilled technical employees. Consistent production quality and reliable delivery are also important when supplying larger electronics companies.
Small manufacturers can begin by identifying a specific component or manufacturing capability where they have an advantage. Building documented quality processes, improving production consistency, investing in suitable technology and demonstrating reliable delivery can help them meet supplier requirements and develop longer-term relationships with larger electronics manufacturers.
