India's Electronics Sector Poised to Hit $500 Billion, Rivaling IT by 2030
Overview
India's electronics industry is on a rapid ascent, projected to nearly triple its revenue to $500 billion by 2030, matching the established IT services sector. Driven by government incentives and global supply chain realignments, this manufacturing boom promises significant economic growth and job creation, positioning India as a major global player. The sector is expanding at a 32% compounded annual growth rate, far outpacing the IT industry's projected 12%.
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Manufacturing Powerhouse Emerges
India's electronics industry is charting an aggressive growth trajectory, with ambitions to reach a staggering $500 billion in revenue by 2030. This surge is expected to place it on par with the nation's dominant IT services sector. Last year, the electronics sector generated $125 billion. A senior official from the Ministry of Electronics and Information Technology (Meity) projects a compounded annual growth rate of 32% for electronics, a pace significantly faster than the IT sector's anticipated 12% annual growth from its current $283 billion revenue base.
Policy Tailwinds and Global Shifts
This rapid expansion is underpinned by strategic government initiatives, including financial assistance for electronics manufacturing launched in April 2020. Furthermore, evolving global geopolitical dynamics are positioning India as a favored destination for electronics supply chains seeking diversification away from China and other Asian hubs. Consultants note increased inquiries from multinational corporations about establishing or expanding operations in India.
Meity's Electronics Components Manufacturing Scheme (ECMS) is designed to incentivize local production of components, a move expected to substantially boost revenue. This policy aims to attract major global firms to ramp up manufacturing within India, creating a more robust domestic ecosystem. Industry leaders see this as a natural progression as the IT sector faces potential headwinds from AI-led automation.
Employment and Wage Realities
Despite the impressive revenue projections, significant disparities persist between the electronics and IT sectors. The IT industry currently employs 5.8 million people, while the electronics sector accounts for 2.5 million. Salaries also reflect this difference, with electronics engineers earning an average of ₹1.8 lakh annually compared to ₹3.5 lakh in IT services. Some firms, like Tata Electronics, have reported losses despite substantial revenues, highlighting thin margins.
However, initiatives like ECMS are intended to foster higher-value manufacturing, leading to more sophisticated jobs and potentially higher remuneration over time. While factory jobs in electronics may offer lower wages than highly specialized IT roles, they represent critical employment opportunities in manufacturing, often including benefits like housing and employee protection.
