As the world's fastest-growing major economy, India is not only a leader in services delivery, but it is also fast emerging as a global manufacturing hub. One of the strategic sectors driving the Make in India initiative is the Electronics System Design and Manufacturing (ESDM) sector, which presents ESDM investment opportunities for global investors seeking to capitalise on the next wave of digital manufacturing growth.
The domestic electronics manufacturing in India is projected to reach USD 300 billion1 by 2026, representing a compound annual growth rate that positions the sector among the most dynamic manufacturing segments globally.
This growth trajectory is driven by rising domestic demand from India's 1.4 billion population,2 robust policies, as well as increasing digital adoption and global supply chain diversification strategies. These factors are positioning India as an alternative manufacturing hub in the ESDM sector. Additionally, the vision of the government for electronics schemesis to promote self-reliance.
The nation's competitive edge stems from its design excellence ecosystem, making it one of the world's largest electronics design ecosystems. The country accounts for 20% of the global chip design workforce.3 This is complemented by an annual increase in the talent pool by over 1.5 million4 engineering graduates and a growing network of innovation centres and incubators that support the development of R&D infrastructure.
One of the main benefits for investors is the stability of the electronics policy. It is a long-term vision supported by consistent government backing and multi-level financial incentives through both central and regional electronics incentives.
India's strategic location edge also offers proximity to key Asia-Pacific and Middle East markets, enhances port infrastructure with multimodal connectivity, and provides optimal time zone positioning for global business operations.
Together, these factors make a compelling investment opportunity for global electronics manufacturers seeking sustainable growth within government-supported electronics hubs.
Top ESDM Clusters
1. Tamil Nadu
Tamil Nadu stands as India's undisputed electronics manufacturing powerhouse, clocking the highest ever electronics exports of ~12.62 billion in the first 11 months of FY2024-25 - that’s nearly 37% of the country’s total.5 The state is moving steadfastly towards achieving $20-22 billion in annual electronics exports by 2027-28,6 making it one of the top electronics zones for investment.
The state has also announced a ₹500-crore Semiconductor Mission, under which semiconductor manufacturing parks will be set up in Sulur and Palladam.7 The state's strategic focus on large-scale OEM manufacturing and complete supply chain development has attracted global8 industry leaders, creating a mature ecosystem with established supplier networks and R&D facilities through comprehensive Make in India electronics initiatives.
Tamil Nadu has positioned itself as a prime destination for companies adopting the ‘China+1’ approach to diversify their production locations. The state's capabilities in the electronics, textiles and automotive industries have been instrumental in making it one of the leading exporting states of India with over USD 52 Billion during FY 2024-25.9 Top international corporations, such as Foxconn, have established major facilities within the state, employing over 40,000 individuals in ESDM clusters in India.
Tamil Nadu’s end-to-end capability, spanning from component manufacturing to final assembly, establishes it as the most comprehensive electronics manufacturing hub in India.
Learn more about investment opportunities in Tamil Nadu here
2. Karnataka
With over 100 fabless chip design houses and more than 400 multinational corporations operating global R&D centres, Karnataka has become India’s leading ESDM investment hub and the country’s leading chip design cluster. Often referred to as the Silicon Valley of India, the state accounts for 50% of India’s share in electronic product companies, 40% share in electronic design, and 10% share in national electronics output.10
Karnataka was the first Indian state to introduce a semiconductor policy in 2010 and a dedicated ESDM policy in 2013. It also pioneered initiatives such as innovation centres, skilling programmes, and electronics manufacturing clusters. The state is home to various Centres of Excellence in IoT, medical electronics, robotics, and other fields.11
The state also launched Karnataka Digital Economy Mission (KEDM) with a vision to make state a USD 300 Billion digital economy. The mission focusses on promoting Software Products & Services including Global Capability Centers; Innovation and Startups; Electronics Systems Design and Manufacturing; Tap into the economic potential of emerging clusters like Mysuru, Mangaluru and Hubballi; and competency building for fresh graduates and existing workforce in future skills through industry-academic collaboration.12
In July 2025, the Karnataka government secured a total investment of ₹7,100 crore from ESDM companies and global capability centres.13 Earlier this year, it also signed an MoU with ASM Technologies Limited for a ₹510 crore investment to expand the company’s ESDM capacity in the state.14 Supported by robust infrastructure, investor-friendly policies, and venture funding, Karnataka is positioning itself as a global ESDM powerhouse poised for sustained growth.
Learn more about investment opportunities in Karnataka here
3. Uttar Pradesh
Uttar Pradesh stands out as India's most dynamic ESDM expansion story, emerging as a key semiconductor hub with a primary emphasis on mobile manufacturing and semiconductor development.
The state accounts for 45% of India's smartphone manufacturing and 55% of mobile components,15 solidifying the state's position in large-scale electronics manufacturing across India.
Uttar Pradesh has become an important centre for exporting consumer electronics. The state boasts the presence of global brands like Samsung, Oppo, Vivo, Dixon Technologies, Sunwoda, Haier.16 Samsung has opened its largest mobile manufacturing plant in the world in Noida17 and has boosted investments in display manufacturing infrastructure.18
Additionally, the state has introduced the Uttar Pradesh Semiconductor Policy 2024.19 As part of the state's electronics incentives programme, the policy offers various financial incentives, including capital assistance, interest relief, land cost reductions, stamp duty exemptions, and power tariff concessions, to attract investments in the semiconductor sector.
Learn more about investment opportunities in Uttar Pradesh here
4. Maharashtra
Maharashtra, India’s most industrialised state, has long led the country’s economic development, innovation, and infrastructure expansion. The state launched its Electronics Policy in 2016 with the aim of becoming India’s leading hub for ESDM sector.
Maharashtra contributes 18% of India’s electronics output as of FY’22,20 and ranks fourth in electronics exports from the country with a contribution USD 3.5 Billion of India’s total electronics exports.21 The state is home to 1,416 electronics and electrical manufacturing units, 17% of India’s total, with key hubs in Pune, Satara, Aurangabad, Ahmednagar, Navi Mumbai, Thane, Nashik, and Nagpur. The state has developed Hi-Tech ESDM Parks with strong utilities, R&D facilities, and incubation infrastructure in Ranjangaon and Talegaon.22
In FY 2023-24 alone, Maharashtra's electronics sector attracted proposed investments worth $5.1 billion.23 Out of India’s total output, Maharashtra’s manufactures 34.35% of Integrated circuits and semiconductor devices, 28.2% of testing navigation and control equipment, 17.5% and 13.7% of consumer electronics and domestic appliances. It also has a strong automotive, industrial automation, and data centre ecosystem, with Mumbai alone accounting for 44% of India’s data centre capacity. 24
The state's policy framework provides strong incentives: a 100% exemption on stamp and electricity duties for 15 years, a ₹1/unit power tariff subsidy, an Industrial Promotion Subsidy, and special packages for lithium-ion batteries, LEDs, TFTs, and semiconductors. These proactive policies and ongoing investments are establishing Maharashtra as a leading hub for global ESDM growth.
Learn more about investment opportunities in Maharashtra here
5. Gujarat
Over recent years, Gujarat has become a key player in the ESDM sector, boosting India’s economic growth and strengthening its status as a global semiconductor hub. India’s first semiconductor fabrication plant is being established in Dholera, Gujarat, by Tata Electronics with backing from the state government. Valued at ₹91,000 crore, the plant is expected to commence chip production by December 2026.25
The state government has also established the Gujarat State Electronics Mission (GSEM), aimed at creating a vibrant ecosystem for electronics, semiconductors, displays, design, and innovation. GSEM’s objective is to position Gujarat as a leading national ESDM hub.26
The state government has also rolled out the Gujarat Electronics Policy (2022-28), which offers substantial capital assistance for ESDM investments. For instance, projects with eligible capital expenditure of up to ₹1,000 crore can receive up to 20% support, capped at ₹200 crore, while projects exceeding ₹1,000 crore are eligible for up to 15% assistance on the incremental amount.27
Additionally, Gujarat plans to develop new Electronics Manufacturing Clusters (GEM Clusters) over the next five years and establish Electronics Common Facility Centres (E-CFCs) to provide shared utility, welfare, and manufacturing support services. The state government has also set up Gujarat Electronics Training (GET) Cells to offer industry-oriented training to people in collaboration with leading institutions to bridge the skill gap.28
With large-scale investments, robust policy support, and a strong focus on infrastructure and skills, Gujarat is rapidly shaping its future as an ESDM powerhouse.
Learn more about investment opportunities in Gujarat here
6. Telangana
Telangana was among the first states to initiate a policy aimed at boosting its ESDM ecosystem, launching the Telangana State Electronics Policy in 2016. Under this policy, the state committed to developing world-class infrastructure such as ready-to-occupy plug-and-play facilities, common facilities centres with advanced prototyping and testing capabilities, and dedicated electronics manufacturing clusters. The policy also provides targeted incentives and skill development initiatives to attract both global and domestic electronics entities.29 Supported by strong policy intent, Telangana has already established 1,80,000 sq ft of production-ready space at its E-City EMC, with plans for an additional 15 lakh sq ft in progress PPPs.30
Telangana has attracted major investments such as Radiant Appliances’ LED TV plant with a capacity of 45 lakh units per year, Premier Energies’ ₹700 crore solar PV facility, Olectra Greentech’s ₹600 crore electric bus plant, Biliti Electric’s world’s largest electric three-wheeler facility, and Qualcomm’s ₹3,900 crore Hyderabad campus expansion.31
Adding to this growth is Foxconn's FIT plant near Hyderabad. Even amid global supply chain disruptions, Foxconn has expanded production capacity in India, doubling its revenue to over $20 billion in FY25. It has further strengthened its semiconductor footprint through a ₹3,700 crore JV with HCL.32 These projects underscore Telangana’s growing stature as a diversified electronics and clean-tech manufacturing hub.
Learn more about investment opportunities in Telangana here
7. Andhra Pradesh
Andhra Pradesh has established itself as a leading export gateway for electronics manufacturing in India, with a strategic focus on Electronic Manufacturing Clusters (EMCs) and component production.
The state's key differentiators include four established EMCs at Tirupati, Sri City, and Kopparthy, featuring anchor units and comprehensive supplier ecosystems.33 The direct access to Visakhapatnam and Krishnapatnam ports offers outstanding export infrastructure. At the same time, the presence of major OEMs and tier-1 suppliers fosters a mature industrial ecosystem for those keen to invest in the electronics sector in India.
The Andhra Pradesh Electronics Manufacturing Policy 2024-29 and Semiconductor and Display Fab Policy 4.0 2024-29 are the mainstay of the state’s ESDM ecosystem. The Display Fab Policy provides 60% of the incentive amount approved by the government of India for projects approved under the India Semiconductor Mission, limited to a maximum of 30% of the total approved project cost.34
The dedicated logistics and clearance facilities, combined with strategic port connectivity, make Andhra Pradesh ideal for export-oriented electronics manufacturing operations seeking to leverage India's competitive manufacturing costs while effectively accessing global markets to invest in India's tech manufacturing sector.
Learn more about investment opportunities in Andhra Pradesh here
Central Government Support Framework
The Government of India has established a comprehensive support framework through multiple flagship schemes designed to accelerate the growth of the ESDM sector.
Among the government electronics schemes, the Production Linked Incentive scheme is a game-changer. With a total outlay exceeding INR 40,995 crore, it covers mobile manufacturing, IT hardware, semiconductors, and components, offering 4-6%35 incentives on incremental sales for eligible companies over five years with defined performance milestones.
This scheme is one of the largest manufacturing incentive programmes worldwide, aimed at establishing global leaders in electronics manufacturing in India.
The Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors provides 25%36incentives on capital expenditure for component manufacturing, focusing on active components, passive components, and semiconductor assembly and test operations.
The enhanced Electronics Manufacturing Clusters (EMC 2.0)37 initiative, with an outlay of ₹3,762.25 crore, will facilitate the establishment of both Electronics Manufacturing Clusters (EMCs) and Common Facility Centres (CFCs).
Additionally, the government also offers 100% FDI38 in research and investment in ESDM through an automatic route.
India's transition from a consumer electronics market to a global manufacturing hub signifies one of the most notable industrial shifts of the 21st century, providing global investors with not just a market but an extensive ecosystem aimed at sustainable growth and international competitiveness in the electronics manufacturing sector in India.
