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Going forward, rapid urbanization, rising personal disposable income, adoption of high-end technology devices, high technology obsolescence and product innovation, competitive pricing of products, easy financing schemes, expansion of organized retail and distribution networks, and several government initiatives are going to be major drivers for the growth of the electronics industry in India. On the back of these, there exists huge opportunity for the domestic manufacturers. The total production of electronics hardware goods in India is estimated to reach US$ 104 billion by 2020.

The mobile phone industry in India expects that the Government of India's boost to production of battery chargers will result in setting up of 365 factories, thereby generating 800,000 jobs by 2025.

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.

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.

Production of Electronics Sector (Rs. Crore)

Item 2013-14 2014-15 2015-16* 2016-17 2017-18
Consumer Electronics 47599 55806 55765 64752 73524
Industrial Electronics 33600 39374 45083 62214 69051
Computer Hardware 17484 18691 19885 20879 21401
Mobile phones 26650 18900 54000 94000 132000
Strategic Electronics 13800 15700 18055 20760 23562
Electronic Components 32102 39723 45383 52099 58351
Light Emitting Diodes (LED) 1941 2172 5092 7134 9630
Computed Total 180454 190366 243263 317331 387525
*- estimates are as provided by respective Industry Associations. Source: MEITY, Government of India

During the period 2013-14 to 2017-18, domestic production of the electronics industry registered a robust CAGR of 21%. The domestic production was valued at US$ 47 billion in 2016-17, with mobile phones accounting for the largest share in production (34.1%), followed by consumer electronics (19.0%), industrial electronics (17.8%) and electronic components (15.1%). The value addition of electronics production is in the range of 5 - 30%, dependent upon the stage of the value chain, with estimates indicating a 25-30% value addition in components manufacturing, and 5-15% at the Semi Knocked Down Kit (SKD) assembly stage.

During 2016-17, India’s export of electronic items increased after a declined for five consecutive years, from US $ 5.7 billion to US$ 6.1 billion. Import of electronic items during the same period were valued at US$ 51.5 billion, witnessing a year-on-year growth of22.9%. During 2017-18, major export destinations for Indian electronic goods were the USA, the UAE, China, Singapore and Germany. In the case of imports, China was the predominant source, accounting for 59.5 % of India’s total imports of electronic goods. Other major source countries were South Korea, Singapore, Malaysia, the USA and Vietnam.

India’s consumption of electronics in 2017-18 has been estimated at almost double of the domestic production. This demand-supply gap is met through imports of these products which now account for 11.1 % of India’s total imports. Imports have been dominated by telecommunication instruments (42.4%) and electronic components (19.8%). These two categories alone account for 6.9% of India’s merchandise imports.

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 FDI in the electronics sector amounted to US $ 1.97 billion during the period April 2000 to June 2018, accounting for 0.51 % of the total FDI inflows into the country.



General Incentives

  • The Government of India has introduced several policy measures in the Union Budget 2018-19 to provide impetus to the manufacturing sector. The Union Budget for 2018-19 included companies with a turnover of up to Rs. 250 crore to avail of the 25 % income tax reduction. These tax reforms are expected to lead growth in local production of consumer electronics, consumer packaged goods (CPG) and fast-moving consumer goods (FMCG).
  • The 2018 Budget also introduced an increased Basic Customs Duty (BCD) on certain electronic products including mobile phones, televisions (LCD, LED and OLED) and their components (mobile phones from 15 to 20 % and televisions from 7.5/10 to 15 % respectively). This is expected to further stimulate the manufacturing of consumer electronicsA new Consumer Protection Bill has been approved by the Union Cabinet, Government of India that will make the existing laws more effective with a broader scope.
  • The Union Cabinet has approved incentives up to Rs 10,000 crore (US$ 1.47 billion) for investors by amending the M-SIPS scheme, in order to further incentivise investments in electronics sector, create employment opportunities and reduce dependence on imports by 2020.
  • The Ministry of Electronics and Information Technology has revised National Policy on Electronics 2012 (NPE) to focus on increasing competitiveness, innovation, R&D, promoting/incentivising exports in ESDM
  • The Government of India has allowed 100 % Foreign Direct Investment (FDI) under the automatic route in Electronics Systems Design & Manufacturing sector. FDI into single brand retail has been increased from 51 % to 100 %; the government is planning to hike FDI limit in multi-brand retail to 51 %.

Modified Special Incentive Package Scheme (MSIPS) 

In order to promote large scale manufacturing in the country, a Modified Special Incentive Package Scheme was announced by the Government in July 2012. The scheme provides for:
  • Capital subsidy up to 20-25% upto10 years on capital expenditure.
  • 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.

So far, total 322 applications, with investments amounting to Rs. 1,33,861 crore have been received under M-SIPS. Of which, 148 applications with investment of approximately Rs. 27,460 crore have been approved. 19 applications with investments of approximately Rs. 12,253 crore have been recommended by the Appraisal Committee for approval, 80 applications with investments of approximately Rs. 42,193 crore have been closed due to incomplete applications or not meeting the eligibility criteria under the scheme and 73 applications involving investments of Rs. 14,378 crore are under appraisal. There are following 2 mega projects with proposed investments of over 1 billion USD*.

*-Ministry of Electronics and Information Technology Annual Report 2017/18

Electronic Manufacturing Clusters

To create and strengthen the infrastructure ecosystem for electronics manufacturing, the Government notified Electronics Manufacturing Cluster (EMCs) Scheme in October 2012 to support creation of world-class infrastructure for attracting investments in Electronics System Design and Manufacturing. Provisions include :-

  • subsidy of 50-75% – up to US$ 10 Million per 100 acres of land which are applicable to both greenfield and brownfield projects.

Electronics Development Fund

Electronics Development Fund was launched in February 2016 with the objective of creating a vibrant ecosystem of innovation and research and development (R&D) with active industry involvement.

With this objective, EDF was set up as a “Fund of Funds”, to participate in professionally managed “Daughter Funds”.

22 Daughter Funds have been selected for investment through EDF, with a cumulative commitment of Rs. 1227 crore.

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.




Companies selling electrical and electronic goods in the EUmust 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.

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


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

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

North America

California has passed the Electronic Waste Recycling Act of 2003 (EWRA). This law prohibits the sale of electronic devices after January 1, 2007, that are prohibited from being sold under the EU RoHS directive, but across a much narrower scope that includes LCDs, CRTs and the like, and only covers the four heavy metals restricted by RoHS. EWRA also has a restricted material disclosure requirement.

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