India’s Electronics Manufacturing Boom: Why MSMEs Are Becoming the Backbone of the Industry

India’s electronics manufacturing sector is no longer a future story.
It is happening now—and MSMEs are playing a far bigger role than most people realise.

Recent industry data shows that India’s electronics consumption is expected to grow by 13–17% year-on-year in FY26. This growth is being driven by rising household incomes, sustained government initiatives, and targeted policy interventions aimed at strengthening domestic manufacturing.

What makes this phase different is who benefits from the growth.

MSMEs’ Rising Share in Electronics Manufacturing

In CY25, MSMEs are expected to contribute 25–35% of total industry revenue, while non-MSMEs account for the remaining 65–75%.

This distribution highlights a critical shift:

• Large enterprises continue to drive scale and volume

• MSMEs increasingly power components, assemblies, sub-systems, and value-added manufacturing

India’s electronics ecosystem is evolving into a multi-layered supply chain, where MSMEs are indispensable—not optional.

What Is Driving This Growth Momentum?

The acceleration in electronics manufacturing is the result of policy consistency and execution, not temporary demand spikes.

1. Production Linked Incentive (PLI) Scheme

The PLI scheme has played a central role by:

• Encouraging domestic production

• Incentivising incremental output

• Reducing reliance on imports

By linking incentives directly to production performance, the scheme has created long-term confidence for manufacturers planning capacity expansion.

2. Import Substitution and Domestic Manufacturing Push

Policy measures now actively support:

• Replacement of imported electronics with Indian-manufactured products

• Increased localisation of components

• Development of domestic supplier networks

For MSMEs involved in electronics components, assemblies, and contract manufacturing, this shift has opened sustainable business opportunities, not short-term advantages.

3. Mandatory Standards and Certification Requirements

The introduction of:

• Certification requirements for resale of imported electronics

• Compliance with Indian quality standards

has strengthened domestic manufacturers and reduced unfair cost advantages enjoyed by imports.

This has further improved the operating environment for Indian MSMEs.

Semiconductor India Programme: Building the Foundation

The Semiconductor India Programme, launched in 2022, represents a long-term structural transformation of India’s electronics ecosystem.

Key developments include:

• 10 semiconductor projects approved

• Estimated investments of around ₹4.6 lakh crore

• Investment levels significantly higher than initially envisaged

While semiconductor fabrication itself is capital-intensive, its downstream impact is substantial. It creates demand for:

• Electronic components

• Packaging, testing, tooling, and ancillaries

• Supporting manufacturing services—many of which are MSME-driven

Electronics Production Outlook

With supportive policies and rising industrial demand:

• Electronics production is expected to grow by 10–20%

• Growth is supported by both consumer and industrial electronics

• MSMEs engaged in manufacturing and assembly are positioned for sustained expansion

This is not cyclical growth—it reflects structural strengthening of the manufacturing ecosystem.

What This Means for MSMEs

For MSMEs, the current environment offers a clear opportunity—but also a clear requirement for planning.

Opportunities exist in:

• New electronics manufacturing units

• Capacity expansion of existing facilities

• Component manufacturing and sub-assemblies

• Integration into domestic supply chains

However, real benefits depend on:

• Correct identification of applicable subsidy schemes

• Proper project structuring

• Alignment with government policy guidelines

Role of Government Subsidies in Electronics Manufacturing

Government incentives are designed to:

• Reduce capital costs

• Improve project viability

• Encourage technology adoption

• Support domestic manufacturing over imports

But subsidies are outcome-driven. Only manufacturers who align investments, timelines, and documentation correctly are able to realise these benefits.

How Amplus Subsidy Solutions Supports Electronics MSMEs

Amplus Subsidy Solutions provides end-to-end government subsidy consulting for electronics manufacturers, including:

• Subsidy feasibility analysis

• Identification of central and state government schemes

• Project structuring aligned with policy requirements

• Documentation and online portal filing

• Departmental coordination and post-approval follow-ups

Our focus is simple:
Convert policy opportunities into real financial benefits for MSMEs.