As we stand on the threshold of 2026, the global electronics industry is undergoing a profound transformation. It is now a linchpin of industrial, strategic, and geopolitical competition, with implications for economies, national security, and everyday life. In a world where electronic systems power everything from personal communication to national infrastructure, the industry’s trajectory through 2026 and beyond will be a trendsetter for economic competitiveness and technological leadership worldwide.
Worldwide, electronic systems and semiconductor markets have regained strong growth momentum following recent supply fluctuations and trade tensions. In major economies, consumer-facing electronics still matter – smart TVs, connected appliances and IoT devices feature prominently in growth forecasts – but industrial and strategic demand is shaping the industry’s future. AI acceleration, 5G/6G networks, edge computing and automated factories are expanding the role of electronics far beyond personal use into the backbone of tomorrow’s digital economy.
For emerging economies like India, 2026 marks a pivotal year. Once predominantly an assembly hub, India’s electronics landscape is evolving quickly toward manufacturing depth and export competitiveness. Under initiatives like Make in India and Production-Linked Incentive schemes, India is targeting an ambitious USD 300 billion in domestic electronics production by 2026.
Despite progress in finished products, the industry’s most strategic component – the semiconductor – remains the ultimate litmus test of technological sovereignty. Demand for advanced logic, memory and power chips continues to skyrocket as AI, data centres, autonomous systems and EVs proliferate. However, high-end semiconductor fabrication is concentrated in a few global hubs, creating political and economic frictions. Expansion efforts are underway; India aims to bring complex chip manufacturing and packaging closer to local markets.
Now the industry’s evolution will hinge on architectural and material innovation as much as volume growth. Emerging manufacturing techniques like 3D-printed electronics, wide-band-gap power devices (such as GaN and SiC), and advanced packaging are reshaping how electronic systems are built and what they can do.
Integration with AI and machine learning at the edge – beyond centralised cloud systems – is transforming everything from consumer devices to industrial controls. AI-powered industrial machines, smart wearables and edge computing systems are now central to innovation narratives that go far beyond smartphones and laptops.
Governments play a deciding role in semiconductor incentives, R&D investment, and skills ecosystem development. India’s push into electronics manufacturing underscores how policy can unlock domestic value addition and attract foreign direct investment.
A young workforce is being credited with driving innovation in design labs and new technology ventures. This demographic shift could help transcend low-value assembly toward high-value engineering and R&D.
By the end of the decade, the core electronics industry will be defined by: reducing reliance on limited geographic hubs for chips and components; hardware designed for AI workloads will proliferate; energy efficiency and green manufacturing will be essential competitive factors, and new alliances and regional clusters will diversify global supply chains.
Let us check a few facts about a comprehensive, forward-looking overview of India’s electronics industry – where it stands now, the key forces shaping its future, and what lies ahead in the coming decade. India’s electronics production rose from Rs. 1.9 lakh crore in 2014–15 to Rs. 11.3 lakh crore in FY 2024–25 – a six-fold jump in a decade. Exports have similarly surged eightfold in that period.
Production Linked Incentive schemes significantly boost manufacturing across mobile phones, IT hardware, and components. The Electronics Components Manufacturing Scheme offers capital subsidies to build domestic production of PCBs and critical parts. The Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors supports capital expenditure for high-value component plants. These policies aim to reduce dependence on imports, attract foreign investors, and expand high-value manufacturing. The global supply-chain shift, e.g., China + 1 strategies, is prompting electronics makers to diversify production to India. States like Uttar Pradesh, Tamil Nadu, Karnataka, and Andhra Pradesh are becoming hubs for manufacturing and exports — bringing infrastructure and investment.
There are certain challenges that India must overcome. It includes Component Import Dependency – despite growth in assembly, 85–90 % of electronics component value is still imported, especially from China, Korea, and Taiwan. Building domestic supply chains for PCBs, semiconductors, connectors, and precision parts remains a major hurdle. Bureaucratic delays in certifications are slowing production schedules and product launches. Production costs in India can be 10–20 % higher than in other Asian hubs, and R&D infrastructure for high-end semiconductors is still limited. India needs deep innovation capacity – not just assembly, but to move up the value chain.
India has set a target for itself for the coming years, such as a target of up to USD 500 billion in electronics manufacturing output by 2030. Achieving this would require scaling capacity, improving infrastructure, and drawing more global players into deeper parts of the supply chain. India needs to broaden Electronics Ecosystem Growth – Automotive electronics, industrial IoT, wearables/AI devices, and telecom equipment to expand domestic and export markets. EMS output is projected to grow rapidly, potentially capturing a larger share of the global EMS market. Semiconductor Ecosystem Development – policies are moving into a “scale-up phase” to build design, assembly, and, over time, manufacturing capabilities – crucial for tech sovereignty and global relevance. Global shifts in supply chain diversification present opportunities for India to attract investments that might otherwise be concentrated in China or Southeast Asia.
Geopolitical-economic dynamics are a significant stumbling block for India’s electronics industry, especially in relation to China and the United States – but it’s also both a challenge and an opportunity.
India’s electronics manufacturing growth has been strongly influenced by global tensions between China and the U.S. After the pandemic and during the U.S.-China trade/tech war, global supply chains began diversifying away from China – a “China +1” effect – and India benefited from this shift as multinational firms looked for alternatives for parts of their production.
Despite India’s assembly growth in mobile phones and other electronics, the industry remains heavily reliant on Chinese imports for key components and machinery. This dependency means that geopolitical friction with China can slow production, raise costs, and create supply bottlenecks for Indian electronics makers.
U.S.-India trade Frictions are also impacting growth. The U.S. imposed a high tariff of up to 50 % on Indian goods, which affects overall trade dynamics that make it harder for Indian electronics producers to scale exports cost-effectively. Hence, India is caught in a complex geopolitical squeeze: China remains essential for many inputs but is a strategic rival, while the U.S. provides market and technology ties but has also used tariffs as leverage.
On the other hand, India’s electronics exports to the U.S. had raced ahead by leveraging trade tensions that kept Chinese goods less competitive. But the recent reduction of U.S.–China tariffs has reduced India’s cost edge by around 10 percentage points, threatening export growth and investment momentum in the sector. India’s industry competitiveness isn’t purely industrial – it’s shaped by geopolitical policy decisions in Washington and Beijing.
Nevertheless, India’s electronics industry is poised for one of the most transformative growth phases in its history. With supportive policy frameworks, rising global demand, and strategic investments in talent and infrastructure, India could evolve from a largely assembly-focused hub to a comprehensive electronics and semiconductor powerhouse over the next decade – if it successfully strengthens its component base, resolves regulatory bottlenecks, and nurtures innovation ecosystems.
Devendra Kumar
Editor
