The laziest argument about Indian electronics comes in two versions. Government cheerleaders say we now manufacture almost every phone sold here, as if a finished handset automatically means the value chain is Indian. Cynics say India merely screws imported parts together, as if assembly at enormous scale creates no jobs, suppliers or industrial knowledge. Both positions save their owners from reading policy documents. I have read them, and my conclusion is less convenient: India’s electronics expansion is real, strategically valuable and still far too dependent on imported components and foreign technology.
The government’s 2026 ECMS progress note says electronics production and exports have risen sharply over the past decade and lists approved component projects across multiple states. Official figures deserve scrutiny, especially projections presented beside actual output, but the broad industrial shift is undeniable. Phones made in India are exported at scale. Global manufacturers and contract assemblers have deepened operations. The Modi government deserves credit for using incentives, tariffs, infrastructure and market access to force electronics manufacturing onto corporate board agendas rather than leaving it in conference speeches.
Assembly was a sensible first rung
Critics use “assembly” as an insult, but every manufacturing climb begins somewhere. Final assembly creates demand for packaging, logistics, testing, tooling, maintenance and workforce discipline. It teaches governments what industrial parks actually require: reliable power, customs speed, transport, housing and managers who can solve problems before a production line stops. It also creates bargaining power. A country buying and making hundreds of millions of devices can ask suppliers to locate nearby in a way a small market cannot.
The problem begins when the first rung becomes a hammock. If imported displays, camera modules, printed circuit boards, passive components and machinery account for much of the value, production can grow while technological dependence remains. Trade statistics may look impressive even as profit, intellectual property and high-skill design stay elsewhere. India should not be embarrassed by assembly. It should be impatient with staying there.
The component scheme targets the right weakness
The Cabinet’s original ECMS approval identified domestic value addition and integration with global value chains as core goals. That is the correct diagnosis. The scheme supports categories such as sub-assemblies, components and materials where scale, yield and patient capital matter. Later approvals covering printed circuit boards, camera modules and related inputs suggest policy has moved beyond the ceremonial announcement stage.
Still, approvals are not factories, and factories are not competitiveness. Government releases mix committed investment, projected production and expected jobs; readers must keep those categories separate. Projects can be delayed, resized or made dependent on continued protection. The ministry should publish plant-level milestones, commercial-production dates, incentive disbursements and audited domestic value addition. If confidentiality prevents every detail, aggregate performance by product category should still be visible. Industrial policy earns trust by showing which bets worked and closing those that did not.
Chinese brands still understand the Indian buyer
Policy discussions sometimes imagine Chinese smartphone dominance as a temporary error that patriotic manufacturing will correct. That misunderstands the market. Xiaomi, Vivo, Oppo, Realme and their peers built distribution, service networks, financing relationships and products calibrated to Indian priorities. They offered large batteries, fast charging, attractive screens and aggressive specifications at price points where every thousand rupees matters. They also learned online and offline retail simultaneously. A “Made in India” label does not erase that accumulated consumer knowledge.
Nor should success be measured by replacing Chinese logos with different foreign logos. India benefits when any manufacturer produces locally, exports, develops suppliers and employs people under clear rules. Economic security requires diversification and enforceable standards, not ethnic theatre about brands. If an Indian-owned company builds a weak phone with poor service, consumers should not be conscripted into buying it. Industrial patriotism belongs in patient capital, research and procurement design; it should not become a tax on households seeking value.
Tariffs can create time, not competence
Import duties helped make local assembly financially attractive. Used indefinitely or unpredictably, they also raise costs, complicate planning and protect inefficient suppliers. The government should treat tariffs as a staircase with published logic. Duties on finished goods can encourage local production; inverted structures that make components expensive can sabotage the next stage. Frequent changes reward lobbying over engineering. Companies should know what localisation milestones will lead to lower input costs and when protection will taper.
India must also preserve export competitiveness. A factory serving only a protected domestic market may remain small and complacent. Export production imposes global demands on price, quality and delivery. The strongest case for incentives is that they bridge initial disadvantages while firms reach such scale. The weakest is that they reimburse production that would have occurred anyway. Scheme evaluation must attempt to distinguish the two, even though attribution is politically uncomfortable.
The skills question is not solved by a job count
Electronics plants create large numbers of line jobs, many valuable to first-generation industrial workers and women. Yet job quality, retention and mobility matter. Can an operator become a technician, a technician a process engineer and an engineer a supplier entrepreneur? Are contract workers trained or endlessly replaced? Do factory clusters provide safe transport and affordable housing? Headline employment counts conceal whether capability accumulates in people.
Component manufacturing needs materials science, precision engineering, tool design, quality systems and production research. Universities and polytechnics should work with clusters on curricula, apprenticeships and shared laboratories. Firms receiving public support can be required to report training outcomes without imposing impractical hiring quotas. India’s demographic advantage becomes industrial capability only when workers learn skills that remain valuable beyond one subsidised line.
Design and ownership are the harder frontier
Manufacturing depth does not automatically create Indian product companies. Contract manufacturers operate on thin margins and client-controlled specifications. Moving into design requires risk capital, patient procurement and access to intellectual property. Government should support chip design, embedded systems, industrial electronics and specialised products where Indian firms can own more of the stack. Trying to recreate every global consumer brand is unnecessary. Building defensible firms in power electronics, medical devices, automotive systems or telecom equipment may create more durable value.
Public procurement can help if standards are clear and orders do not become guaranteed shelters for mediocre products. Startups need reference customers, but hospitals, railways and defence users need reliability. Competitive trials, transparent certification and staged orders can balance those needs. The worst outcome would be “indigenous” equipment that depends on opaque imports, performs poorly and survives because officials fear cancelling a national champion.
Measure the right things
I want the government dashboard to track actual investment, production, exports, local input share, research spending, supplier concentration and job progression. It should identify imported choke points rather than celebrating gross output alone. An Indian-assembled phone with a locally made enclosure is progress; a phone with locally produced boards, modules and manufacturing equipment is more progress. Statistical honesty allows both statements.
Environmental performance belongs on the dashboard too. Electronics manufacturing consumes water, chemicals and energy and produces difficult waste. Component localisation should not mean moving pollution into districts with weak enforcement. Plants need transparent compliance, worker protection and credible recycling links. A green supply chain can become a competitive advantage as global buyers face stricter reporting requirements.
Credit now, harder questions next
The Modi government has moved Indian electronics from aspiration to scale. That is a substantial achievement and the opposition’s habit of dismissing it as mere assembly is intellectually stale. Scale attracts suppliers; exports impose discipline; incentives can alter location decisions. But government publicity often treats projected outcomes as history already written. I will applaud operating plants, rising local value and firms that become globally competitive—not a stack of memoranda.
Chinese brands will remain powerful because they combine supply-chain strength with sharp knowledge of Indian consumers. India’s answer should be to become indispensable to their manufacturing while building domestic capabilities that outlast any one brand. Competition, not slogans, will produce better products and stronger suppliers.
The assembly boom was the opening chapter. ECMS is an attempt to write the middle: components, materials and equipment. The ending worth pursuing is not autarky, which would be expensive and unrealistic. It is strategic depth—the ability to design more, make more, switch suppliers and capture a larger share of value. India has earned the right to celebrate progress. It has not earned the right to graduate itself early.
