State of Electronic System Design and Manufacturing (ESDM) industry in India

Part 1/3: Taking stock

Recently we celebrated India’s 77th Independence Day. India’s recent achievements in space also captured the nation’s imagination. Besides, India leads from the front in areas like startup innovation and public stacks like AADHAAR and UPI. But what about ESDM? ESDM is an important growth and strategic sector for India, being one of 25 priority sectors for Make in India. In this first of three part series we take stock of how India as a nation has performed thus far in this domain and what lies ahead.

Achievements

During the period 2018–22, India made significant progress; notable achievements include:

• Electronic product export clocked USD 24 billion in FY 2023
• Second largest mobile handset manufacturer and smartphone market with over 98% units sold made in India
• Domestic manufacturing contribution in TV product segment has reached near 100% as of Q3, 2022
• Earphones and smartwatch production reached USD 977 million in FY 2023, with few sub-segments clocking over 33% domestic production

Goals

India has set lofty goals over the next four years to 2026:

• USD 5 trillion economy -> USD 1 trillion digital economy -> USD 300 billion electronics manufacturing -> USD 180 billion electronics consumption -> USD 120 billion electronics exports
• Electronic goods among 2–3 top ranking Indian exports
• Move from being a global electronics goods exporting laggard at 16th place (USD 15 billion) -> top 5 (USD 120 billion)

Stats

To contextualize India’s evolving ESDM story, we will look at some data with a limited data lens to four years backward (FY 2018–22) and four years forward (FY 2022–26) with 2022 as the marker year.

All $ in USD billion

Analysis

Few encouraging observations:

• Domestic production grew at 15% in FY 22
• Electronics consumption grew at 26% in FY 22
• Electronic product export grew at 34% in FY 22 and over 50% in FY 23

Few challenges as we look at the CAGR four year period past and future:

• Domestic production growth needs to jump from 9% -> 37%
• Electronics consumption growth needs to jump from 8% -> 13%
• Electronics export growth needs to jump from 23% -> 69%

Is this even possible? Or are we being unrealistic and wishful?

Conclusion (Part 1)

We observe that India is directionally got some momentum last year, but to realistically reach Vision 2026 goals, there is a need to:

1. Learn (from countries that achieved such targets before)
2. Set (right strategy and aligned policy)
3. Execute (determined and steady approach)

Next

In next parts to this article, we will:

• Define key metrics and learn from few East Asian achievers (especially China and Vietnam): Part 2
• Highlight possible strategy options to set and execute policy imperatives for India: Part 3

Plug

Are you interested in Electronics/ Semiconductors/ Deep-Tech?

• Stay connected with me on LinkedIn or Medium
• Check 1THNG for any IoT/ electronic product requirements
• Check USPI for any strategy/ consulting requirements

Series Links: State of Electronic System Design and Manufacturing (ESDM) industry in India

• Part 1/3: Taking stock
• Part 2/3: Understanding challenges
• Part 3/3: Setting the India ESDM strategy

Sources

RBI, World Bank, MeITY, Frost & Sullivan, Counterpoint Research