Electronics manufacturing business in India is standing at a major turning point. After a decade-long transformation, India has shifted from being a large importer of electronic goods to a strong global manufacturing and export hub for mobile phones, IT hardware, and telecom equipment. The Indian electronics sector was valued at around ₹1.9 lakh crore in 2014–15, and by 2024–25 it has grown to nearly ₹11.3 lakh crore, mainly driven by the assembly of mobile phones, computers, and telecom products.
However, a gap exists: the major part of the value is in the components market, not in the assembly process. In fact, local value addition is still very low, at 18-20%, which is about half of the 40% that China and South Korea boast of, respectively. During the same period, however, India was a $35 billion electronics parts importer in FY24, mainly consisting of PCBs, connectors, sensors, passives, and semiconductors predominantly from China, Taiwan, Hong Kong, and Vietnam.
At the same time, there is a significant increase in the export of electronic items that have jumped from $23.5 billion in FY22–23 to $38.6 billion in FY24–25, which is more than 30% growth within just a year. In other words, India imports components and exports finished products. The gap between exports and imports is the bright side for the newly formed MSMEs to establish their presence in the electronics industry.
This article talks about the validation of the MSMEs giving birth to the high-potential, export-ready electronics, and component manufacturing projects that the government will support through its policies, global supply chain changes, and market data in the year 2026.
Why Electronic Components Are the Next Big Opportunity
1. Policy Support: From Assembly to Components
The Indian government understands that to reach the $500 billion electronics manufacturing goal it is necessary to progress from basic assembly to complete local manufacturing of components.
- The Electronics Components Manufacturing Scheme (ECMS), which was ratified in April 2025, sets aside ₹22,919 crore for the purpose of encouraging domestic component production.
- Within a matter of weeks, seven projects which have a total cost of ₹5,532 crore were given the green light, among them Kaynes Circuits, SRF Ltd., Syrma Strategic Electronics, and Ascent Circuits.
Read More: Battery Energy Storage Systems Are India’s Next Big Opportunity
Key focus:
- Bring in a lot of investments for component manufacturing
- Promote domestic value addition
- Link Indian MSMEs with global supply chains
2. Heavy Industries & Electronics
The Ministry of Heavy Industries is looking to make a sector that is globally competitive and driven by technology. Electronics is a perfect fit:
- High-tech content
- Strong backward linkages with machinery and capital goods
- Huge export potential through engineered products
Read More: Electronic Products Handbook With Circuit Diagrams
3. Clusters, States & Global OEMs
The manufacturing of electronics is becoming increasingly cluster-based like the automotive hubs of Pune or Manesar, while companies in Tamil Nadu, Gujarat, and Uttar Pradesh are ready to offer MSME-incentives, duty exemptions, and subsidies.(Electronics Manufacturing Business in India)
The worldwide OEMs are already linking India into their supply chains. For example, Apple is already collaborating with more than 45 Indian suppliers, and at the same time, contract manufacturers such as Zetwerk and Foxconn-associated firms are growing their local capacities.
For MSMEs the best strategy is to concentrate on components rather than general assembly.
India’s Electronics Trade: Opportunities for MSMEs
1. Import Dependence: The Gap to Exploit
There are several crucial categories that have import dependence in the range of 70% to 100% as follows:
- Bare PCBs
- SMD & THT passive components
- Microphones and receivers
- Connectors and cables
- Flex PCBA
- Lithium-ion cells for digital devices
- Display assemblies
- Camera modules
- Mechanical metal & plastic parts
The reliance on imports unveils the possibilities for MSMEs to participate in the local manufacturing and export growth.
2. Export Growth: India as a Global Player
The export volume of electronic goods went up from $23.5B in FY22–23 to $38.6B in FY24–25, thus making electronics one of the fastest-growing sectors of India’s exports.
MSME opportunity: As you’re aware, the potential of MSMEs indeed lies in their hands, not in higher import dependency but in rapid export expansion, and any flourishing projects ought to follow this formula.
Read More: The Complete Technology Book on Electroplating, Phosphating, Powder Coating and Metal Finishing (3rd Revised Edition)
High-Potential Electronics & Component Projects for MSMEs
1. Bare PCBs (Printed Circuit Boards)
Why: PCBs are common in all devices, from mobile phones to electric vehicle chargers. A big share of PCB demand in India is still met by imports.
Entry Strategy:
- Commence with single/double-layer PCBs for industrial controls, LED lighting, SMPS
- Slowly expand towards multilayer and HDI PCBs for telecom, EVs, servers
Export Potential: Cater to global EMS companies in India, besides dispatching to Southeast Asia, Africa, and the Middle East
Why MSMEs Suit This: They can take up repeat orders easily, maintain tight client relationships, and avail of clustering opportunities in electronics parks.
2. SMD & THT Passive Components
Why: The demand comprising the world market for resistors, capacitors, inductors is enormous though each of them has relatively low individual value considering their basic features.
Entry Strategy:
- Focus on the production of SMD resistors, MLCCs, and inductors
- Speed up the production process and concentrate on the EMS centers in Tamil Nadu, Karnataka, UP, and NCR
- Provide additional packing services that include tape and reels, for example
Export Potential: Distributors and small EMS companies in Africa, West Asia, and Eastern Europe are potential customers for these products
Why MSMEs Suit This: High capability of production co-existence, strong long-term contracts, and technical complexity being moderate.
Read More: Electrical Components Manufacturing Opportunities in India 2026
3. Connectors, Cables, Relays & Harnesses
Why: At some point, it is hard to find any such categories that do not require interconnections—such as consumer, automotive, and industrial equipment, EVs, and many more.
Entry Strategy:
- Precision connectors: board-to-board, wire-to-board, power
- Cables & harnesses: signal, power, custom auto/EV harnesses
Switches & relays: micro-switches, toggle switches for appliances
Export Model: India as a source can feed the global OEMs and Tier-1 suppliers
Why MSMEs Suit This: Their capabilities of tooling, stamping, and assembly are the basis of the entire process. They are also able to produce from small batches to high volumes.
4. Flex PCBA, Camera Modules & Display Assemblies
Why: High-value sub-assemblies are indispensable for smartphones and consumer electronics
Entry Strategy:
- Become a partner of the brands or contract manufacturers for flex PCBA assembly
- Get the imported sensors and lenses into the camera modules and start gradually localizing parts
- Engage in display assembly (backlights, drivers, frames)
Export Potential: Modules for phones and tablets that are destined for re-export abroad
Why MSMEs Suit This: High per unit value, integration with the mobile export base, and willingness for joint ventures.
5. Mechanical Metal & Plastic Parts
Why: Critical housings, brackets, heat sinks, and frames are essential for the durability of a device.
Entry Strategy:
- Precision plastics: injection molding of casings, bezels, and covers
- Sheet metal & die-cast: brackets, heat sinks, and structural frames
- Thermal & EMI shields
Export Model: Tie-up with EMS/ODM firms to supply devices assembled in India and abroad
Why MSMEs Suit This: Taking advantage of India’s engineering and sheet metal strengths, and lower technical risk than chips
Why Now is the Right Time
- Explosive Export Growth: The electronic goods export experienced a very sharp increase reaching $38.6B in FY24-25 and the main promoting sectors were the smartphones, IT hardware, and telecom products.
- Capital Goods & Technology Depth: Get access to industrial parks, testing facilities, and joint development with large OEMs.
- Government & Policy Support: ECMS, PLI schemes, and state-level incentives prompt MSMEs to manufacture onshore and export worldwide.(Electronics Manufacturing Business in India)
NPCS: Your Partner for Bankable DPRs
Planning a successful electronics component project needs to be done very carefully:
- The size of the market and the potential for exports
- Capex, working capital, break-even analysis
- Technology selection and process design
- Raw material sourcing and vendor risk
- Policy incentives and duty benefits
At Niir Project Consultancy Services (NPCS), we provide:
- An in-depth market survey and techno-economic feasibility report
- A manufacturing process and capacity planning
- Machinery and raw material selection
- Financial modeling and profitability analysis
Our services allow MSMEs to produce professional, bankable reports for investors, banks, and partners.
Read More: Startup Selector
Leaders Shaping India’s Electronics Landscape
- Tata Group: semiconductors, mobile phones, EVs
- Reliance Group (Mukesh Ambani): digital gadgets, networked devices, routers, customer premises equipment
- Entrepreneurs: Rahul Sharma (Micromax), Josh Foulger (Zetwerk Electronics) indicating the necessity of major elements in the value chain
Lesson: the real strength is in having the elements, not only in the production of the goods.
FAQs
Q1. Why focus on components rather than assembly?
The components are more valuable, have long-term contracts, and strong export potentials. Assembly is price-sensitive and unpredictable.
Q2. Which segments are most attractive for MSMEs?
Bare PCBs, SMD/THT passives, connectors, flex PCBA, camera modules, display assemblies, mechanical parts.
Q3. Can small MSMEs export globally?
Yes, many global OEMs source from small MSMEs if quality, specifications, and timelines are met.
Q4. How does import/export data influence selection of the project?
If the balance is in favor of High Imports + Increasing Exports = a great place for starting the new MSME projects.
Q5. How can NPCS help?
NPCS prepares detailed DPRs, market research, process planning, and bankable reports to help MSMEs succeed.
Conclusion
India’s electronics ecosystem is moving from “assemble here, import the rest” to “design and manufacture globally competitive components here”.(Electronics Manufacturing Business in India)
For MSMEs, this is a once-in-a-decade opportunity to:
- Enter high-growth, policy-backed sectors
- Build long-term export relationships
- Move up the value chain to high-value components
By choosing the right niche, technology, and project strategy, MSMEs can become critical links in India’s electronics export engine, transforming India into a global electronics powerhouse.
