The domestic demand for electronics hardware is being fueled by the relatively high growth rate of the Indian economy, aspirations of the younger generation, and the large middle class in India with increasing disposable income. Thus, there is significant opportunity for stepping up the production of electronics hardware in the country. India has the potential to develop and manufacture electronic hardware for the global markets and gain higher global share besides meeting the country’s future requirement in the converging areas of information, communication and entertainment.

The total production of electronics hardware goods in India is estimated to reach US$ 104 billion by 2020. The electronics sector has several verticals in terms of its main constituents. At present the availability of data on the production from this sector is limited to the information provided by various industry associations.

Item 2012-13 2013-14 2014-15 2015-16* 2016-17
Consumer Electronics 40447 47599 55806 55765 64752
Industrial Electronics 25800 33600 39374 45083 62214
Automotive Electronics 5629 7278 NA NA NA
Computer Hardware 9376 17484 18691 19885 20879
Mobile phones 34600 26650 18900 54000 94000
Strategic Electronics 9000 13800 15700 18055 20760
Electronic Components 26645 32102 39723 45383 52099
Light Emitting Diodes (LED) 1275 1941 2172 5092 7134
*- estimates are as provided by respective Industry Associations.
Source: MEITY, Government of India


During 2016-17, India’s export of electronic items declined for the fifth consecutive year. Exports registered a decline of 0.1 per cent during 2016-17, to amount to US$ 5.7 billion. Import of electronic items during the same period were valued at US$ 41.9 billion, witnessing a year-on-year growth of 4.8 per cent. During 2016-17, major export destinations for Indian electronic goods were the USA (16.4 per cent share), UAE (8.0 per cent), China (7.9 per cent), Singapore (5.3 per cent) and Germany (4.2 per cent). In the case of imports, China was the predominant source, accounting for 57.5 per cent of India’s total imports of electronic goods. Other major source countries were South Korea (6.1 per cent), Singapore (4.8 per cent), Malaysia (4.2 per cent), the USA (3.8 per cent) and Vietnam (3.0 per cent).

Foreign Direct Investments

The government allows 100% foreign direct investment (FDI) under automatic route, no industrial license requirement, payment of technical know-how fee and royalty for technology transfer under automatic route. Cumulative foreign direct investments in the capital goods industry amounted to US$ 1.8 billion during April 2000 to June 2017 period. This was nearly 0.52 percent of the total FDI inflows in the country.


The Indian electronics and hardware industry is expected to reach US$ 112-130 billion by 2018 as electronics and hardware manufacturers are looking to increase their manufacturing base in India to cater to the domestic market as well as the Middle East, Africa and SAARC countries#.

The Indian Electronic System Design and Manufacturing (ESDM) market is estimated to grow from US$ 94 billion in 2015 to US$ 400 billion by 2020## Consumption of semiconductors, in the meantime, has also steadily climbed. The semiconductor industry is estimated to grow from US$ 10.02 billion in 2013 to US$ 52.58 billion in 2020 at a Compound Annual Growth Rate (CAGR) of 26.72 per cent$$.

The growing customer base and the increased penetration in consumer durables segment has provided enough scope for the growth of the Indian electronics sector. Also, digitisation of cable would lead to increased broadband penetration in the country and open up new avenues for companies in the electronics industry.

[#. - According to a study by The Associated Chambers of Commerce of India (ASSOCHAM) and EY, ##.- According to a study ‘Indian Electronic System Design and Manufacturing (ESDM) Disability Identification Study’ by the India Electronics & Semiconductor Association (IESA) and EY, $$ .- According to a report by NOVONOUS ‘Semiconductor Market in India 2014 – 2020’]



General Incentives

  • Basic customs duty on digital still image video camera with certain specifications is NIL.
  • Round copper wire and tin alloys used in PV solar cells manufacture excise is NIL.
  • Black light module for use in manufacture of LCD/LED TV panels is NIL (Customs Duty).
  • Organic LED (OLED) TV panels custom duty is NIL.
  • Wafers for use in manufacture of IC modules for smart cards has been reduced from 12% to 6%
  • Inputs for use in manufacture of LED drivers and MCPCB for LED lights, fixtures and LED lamps, the excise duty has been reduced from 12% to 6%.
  • Excise duty on tablet computers has been reduced from 12% to 2% with CENVAT credit or 12.5% with CENVAT credit.
  • Specified Raw materials used for manufacturing pacemakers excise reduced to nil.

Modified Special Incentive Package Scheme (MSIPS) 

  • Capital subsidy up to 20-25% for 10 years on capex.
  • Reimbursement of CVD/excise for capital equipment in non-SEZ units.
  • Reimbursement of central taxes and duties for 10 years in select high tech units like fabs and ATMPs.
  • Available for the entire value chain of identified electronics products.
  • Incentives available for 10 years from the date of approval.

Electronic Manufacturing Clusters

  • Subsidy of 50-75% – up to US$ 10 Million per 100 acres of land.
  • Applicable to both greenfield and brownfield projects.

Areas Based Incentives

  • Incentives for units in SEZ/NIMZ as specified in respective acts or the setting up of projects in special areas such as the North-East, Jammu & Kashmir, Himachal Pradesh & Uttarakhand.
  • National Scheme for Supporting MSMEs in the ESDM sector.
  • For compliance of electronic goods with Indian Standards, both testing and certification are required for exports.
  • Development of Electronic Manufacturing Clusters by MSMEs.




Companies selling electrical and electronic goods in the European Union (EU) must conform to the EU legislation for electrical and electronic equipment (EEE), which includes:

  • The Waste Electrical and Electronic Equipment Directive (WEEE), which sets out the financial and other responsibilities of EEE producers with regard to the collection and recycling of waste from a broad range of EEE at their end of life.
  • The Restriction of Hazardous Substances Directive (RoHS), which bans the use of certain hazardous substances (such as lead, mercury, cadmium, hexavalent chromium and some polybrominated flame retardants) in EEE.


China RoHS: “Measures for Administration of the Pollution Control of Electronic Information Products (EIP)”, commonly known as RoHS is intended to restrict the use of hazardous materials in electrical and electronic equipment. All products manufactured on or after March 1st 2007 for sale in China must adhere to stage 1 requirements.

Products imported into the country for the purpose of re-export or for manufacturing of other export products are excluded. The following requirements need to be adhered to:

  • The hazardous substances which come under the ambit of this measure are Lead (Pb), Hexavalent Chromium (Cr6+), Mercury (Hg), Cadmium (Cd), Polybrominated Biphenyls (PBBs) and Polybrominated Diphenyl ethers (PBDEs). If an EIP doesn’t contain any of these, then the following symbol needs to be used:
  • If any of the above mentioned hazardous substance is present above the maximum concentration value, then the following symbol needs to be used, with the number inside it representing the Environmental Friendly Use Period (EFUP):
  • The user manual of the EIP should contain table of names and contents of toxic and hazardous materials if the product contains them in quantities above the maximum concentration values. China’s maximum concentration values are 0.1 percent for all hazardous substances other than cadmium for which the level is set at 0.01 percent.
  • Packaging of EIPs should be in accordance with the GB18455- 2001 standard.

China Compulsory Certification (CCC) mark is required to be obtained by the manufacturers before exporting to or selling products in China. Several electronics product require CCC mark.

South Korea

South Korea promulgated the Act for Resource Recycling of Electrical and Electronic Equipment and Vehicles on April 2, 2007. This regulation has aspects of RoHS and WEEE.

For further details on Regulations applicable in various geographies, refer to this link: http://www.standardsmap.org/identify