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Amplifying growth

The Indian electronics industry is being driven by macro factors such as growing middle class population & rising disposable income. In addition, declining electronics prices & adoption of high-end technology devices is leading to an uptick in consumption of electronics devices. Furthermore, technology transitions such as roll out of 4G/LTE networks and IoT are driving accelerated adoption of electronics products. Initiatives such as Digital India and Smart City projects have raised the demand for IoT in the market. Similarly, the digital banking sector like wallet players, payment banks will raise demand POS, VSAT-enabled mobile  ATMs, which will give a fillip to the growing industry. 

  •  One of the largest electronics markets in the world, anticipated reaching USD 400 bn in 2025
  •  The electronics market is projected to grow at a CAGR of 17% during 2014-2020
  •  The government has envisioned a target of “Net Zero Imports” by 2020


100% FDI is allowed under the automatic route

In case of electronics items for defence, FDI up to 49% is allowed under automatic route, whereas anything above 49% is allowed through the government approval.

for more details refer FDI Policy 2017


  • India's gaming market to reach USD 801 mn by 2022
  • Indian IoT market to reach USD 9 bn by 2020
  • Fastest growing smart phone market in Asia Pacific

Industry Scenario

The Indian electronics and hardware market grew by 8.6% YoY to reach USD 75 bn in 2015.

Nearly 70-80% of the electronic components market is imports driven. The electronics products segment contributed 82% to the overall market in 2015, and the rest comprised electronic components.
The electronic products industry in India was valued at USD 61.8 bn in 2015 which is further segmented as follows: 

  •   Mobile devices (27%), Consumer Electronics (18%), Industrial Electronics (15%), IT/Office automation (10%), Automotive Electronics (8%), Telecom (8%), Strategic (Aerospace and defence) (7%), Medical devices (4%) and Others (3%)

The electronic component industry was valued at USD 13.5 bn of which electro-mechanical segment had the highest share at 30%. Passive and active segments handled 27% and 22% share respectively. Remaining market of 20% was handled by the Others segment.

Growth Drivers

  • Sector growth rate (p.a.)


  • Mobile manufacturing growth rate (p.a.)


  • Domestic manufacturing growth rate (p.a.)


  • Hardware market growth (y.o.y.)


Key policies

National Policy on Electronics 2012

The vision is to create globally competitive electronics design and a manufacturing industry to meet the country's need and serve the international market.

Modified Special Incentive Package Scheme (M-SIPS)

To offset disability and attract investments in Electronic manufacturing, Modified Special Incentive Package Scheme (M-SIPS) was notified on 27.7.2012.

The scheme is available for both new projects and expansion projects. The scheme provides capital subsidy of 20% in SEZ (25% in non-SEZ) for units engaged in electronics manufacturing. It also provides for reimbursements of CVD/ excise for capital equipment for the non-SEZ units. For some of the high capital investment projects like fabs, it provides for reimbursement of Central Taxes and Duties. The incentives are provided on reimbursement basis. The incentives were available for 29 electronic verticals. Units all across the manufacturing value chain are covered under the scheme. For each of the product category, an investment threshold is prescribed which an applicant has to incur for getting eligible for incentives. The investment threshold varies from Rs 1 Crore to Rs 5000 Crores depending upon a type of project. The incentives are available for 10 years from the date of approval. The scheme was initially opened for 3 years till 26-07-2015 .

The scheme was amended on August 3, 2015. The salient amendments include (i) The term of the scheme has been extended upto 27-07-2020. (ii) The scope of the scheme has been extended to cover additional verticals. (iii) The procedure for grant of approval has been simplified and streamlined.The incentives are now available for investments made in a project within a period of 10 years from the date of application.

Duty Exemption and Remission Schemes

Duty exemption schemes enable duty-free import of inputs required for export production. Duty Exemption Schemes consist of (a) Advance Authorisation scheme and (b) Duty-Free Import Authorisation (DFIA) scheme. A Duty Remission Scheme enables post export replenishment/remission of duty on inputs used in the export product. Duty Remission Schemes consist of (a) Duty Entitlement Passbook (DEPB) Scheme and (b) Duty Drawback (DBK) Scheme.

Electronics Development Fund Policy

Electronics Development Fund Policy provides a framework to set up an Electronics Development Fund (EDF), as a Fund of funds which will foster R&D and innovation in technology sectors like electronics, IT and nano-electronics. EDF will support Venture Funds and Angel Funds, which will be professionally managed and dedicated to these sectors.

Electronics Manufacturing Clusters Scheme

Scheme to provide world-class infrastructure for attracting investments in the Electronics Systems Design and Manufacturing sector.


Notifications for Electronic Products under Public Procurement Order 2017

Public Procurement (Preference to Make in India) Order 2017 (PPO 2017) for Electronic Products

The Government has issued Public Procurement (Preference to Make in India) Order 2017 vide the Department of Industrial Policy and Promotion (DIPP) Notification No.P-45021/2/2017-B.E.-II dated 15.06.2017 to encourage ‘Make in India’ and to promote manufacturing and production of goods and services in India with a view to enhancing income and employment.


Phased Manufacturing Programme (PMP)

Phased Manufacturing Programme (PMP) to promote indigenous manufacturing of Cellular Mobile Handsets, its sub-assemblies and parts/subparts/inputs of the subassemblies thereof.
To promote indigenous manufacturing of Cellular Mobile Handsets, in the Budget 2015-16, a differential Excise Duty dispensation, i.e. Countervailing Duty (CVD) on imports @12.5% and Excise Duty @1% without input tax credit (or 12.5% with input tax credit) was made available to domestic manufacturers of Cellular mobile handsets. 

Amendments in Foreign Trade Policy 2015-20

The amendments in Foreign Trade Policy 2015-20 are detailed herewith.

FDI Facts

  • FDI inflows (in USD) in Apr 2000 - Jun 2017

  • FDI equity inflows growth in 2014-16 viz-a-viz 2012-14

  • FDI allowed in electronics sector

Recent Investments

  • July 2017 - China's Midea Group, plans to invest up to USD 123.5 mn in India.

  • June 2017 - Intel has announced an investment of USD 167.4 mn to expand its R&D presence and build a new state-of-the-art design house in Bangalore. The proposed facility will be located at Intel’s 44-acre campus on Sarjapur Ring Road (SRR) in Bangalore, Karnataka.

  • October 2016 - Holitech Technology, a China-based LCD and touchscreen panel manufacturer, has announced plans to invest up to USD 1 bn in India by the end of 2017.

Major Investors