en.Wedoany.com Reported - India's domestic electronics manufacturing services companies are optimistic about their medium-term business prospects, primarily driven by strong order visibility, healthy demand, and the benefits from recently commissioned production capacities. This conclusion is drawn from research reports by analysts at Motilal Oswal and HDFC Securities.
Motilal Oswal noted in its research report that growth is expected to be driven by expanding opportunities in electronics manufacturing services, semiconductor equipment, telecommunications, defense, railways, electronics, and exports, while benefiting from global supply chain diversification, increased defense spending, and rising demand led by artificial intelligence. These findings are based on an analysis of India's top electronics manufacturing services companies, including Dixon Technologies, Amber Enterprises, Avalon Technologies, Cyient DLM, Data Pattern, Kaynes Technology, and Syrma SGS Technology. The firm stated that sustained capital expenditure investments, coupled with intensive R&D, backward integration plans, and high-value product offerings, could help improve operational efficiency, profit resilience, and long-term competitive positioning.
According to an April research report by HDFC Securities, the sustained surge in electronics exports over the past decade has driven India's electronics manufacturing services export opportunities. Electronics rose from the seventh-largest export category in FY22 to the third-largest in FY25, and further climbed to second place in the first half of FY26. Export value grew from INR 0.4 trillion in FY15 to INR 3.3 trillion in FY25, an increase of nearly nine times, with a compound annual growth rate of 24%. HDFC Securities believes that this structural export upswing, supported by production-linked incentive schemes, global supply chain reallocation, and increased outsourcing by original equipment manufacturers, creates a long-term growth space for Indian electronics manufacturing services players.
According to HDFC Securities, the Indian electronics manufacturing services market was valued at INR 2.5 trillion in FY24, accounting for nearly 24% of total domestic electronics production, and is expected to grow at a compound annual growth rate of 27% to reach INR 8.2 trillion by FY29. The report attributes the expansion of India's electronics manufacturing services industry to rising labor costs in other global regions and the tendency of large original equipment manufacturers to outsource manufacturing rather than invest in their own infrastructure. In the fiscal year ended March 31, 2024, mobile phones, consumer electronics, telecommunications, and industrial electronics accounted for over 84% of the total Indian electronics manufacturing services market.
However, even as India's electronics manufacturing services industry expands, the global market remains dominated by China, which enjoys cost advantages and strong technological capabilities. KPMG India highlighted in its report that outside China, manufacturing activity is concentrated in a few Asian countries—India, Malaysia, Thailand, and Vietnam—while Mexico, due to its proximity to the US market, is emerging as a strong alternative. The report stated that these global hubs have captured the majority of recent relocation, benefiting from the "China+1" strategy, particularly in labor-intensive consumer electronics and automotive-related manufacturing. Despite strong growth, India's share of the global electronics manufacturing services industry remains modest at 5-6%, but is expected to expand over the next decade as manufacturing capabilities accelerate and export opportunities grow.
HDFC Securities found that the Indian electronics market is dominated by the mobile phone segment, accounting for approximately 49% of total electronics consumption, followed by consumer electronics and appliances at 18%, industrial at 12%, IT at 6%, automotive at 5%, telecommunications at 3%, and medical at 2%. Excluding mobile phones, India's domestic electronics production grew at a compound annual growth rate of 13% between FY15 and FY25, reaching INR 5.8 trillion. The Indian government, under its electronics vision, has set a target of achieving $500 billion in electronics production by FY30, including $350 billion in finished goods and $150 billion in components. However, HDFC Securities warned that delays or expirations of incentive schemes and continued reliance on imported components expose companies to supply disruptions and foreign exchange fluctuations, while delayed expansion of component manufacturing scale could constrain growth and profit expansion.
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