The debate over Indian electronics manufacturing is trapped between two exaggerations. Government supporters sometimes speak as if a phone assembled near Chennai has become entirely Indian by crossing the factory gate. Critics respond as if assembly were meaningless screwdriver work. Both positions are lazy. Assembly creates jobs, quality systems, logistics capability and an entry point into global supply chains. It is also the shallow end of value addition. The next test is whether India can manufacture competitive components, develop tooling, deepen design capacity and create suppliers that sell to multiple global customers. The Ministry of Electronics and Information Technology’s Electronics Component Manufacturing Scheme guidelines acknowledge this gap by targeting items such as display modules, camera modules, printed circuit boards, passive components and digital-device battery cells. That is directionally correct. Now the hard work begins.
Assembly was not fake progress
A sophisticated supply chain rarely appears fully formed. Firms begin where India offers a credible advantage: market size, labour, incentives, improving infrastructure and geopolitical diversification. Final assembly is visible and relatively achievable, so it arrives first. Over time, suppliers cluster nearby, workers acquire process knowledge and local managers learn the unforgiving discipline of electronics production. Rejecting this sequence because imported parts remain substantial is like dismissing primary school because it is not a doctorate.
But government communication should stop blurring production value with domestic value added. A high-value imported display and chipset can make the export number look impressive while relatively little value is retained locally. Publish product-level estimates of domestic content using a consistent methodology. Separate assembly, subassembly, component and design contributions. Honest measurement would strengthen the policy because progress could be judged rather than advertised. It would also reveal which incentives merely relocate a final step and which create capabilities with spillover.
The component scheme targets the correct bottleneck
The official ECMS portal lists target segments and mixes turnover-linked, capital-expenditure and hybrid incentives. This flexibility makes sense because a camera module plant, passive-component line and capital-equipment supplier face different economics. Yet flexibility also increases administrative discretion. Approvals need published criteria, milestone tracking and disclosure of disbursements. Companies should receive support for verified investment and output, not announcements at investment summits.
Components are difficult because scale, yield and supplier trust matter. A factory may be capable of producing a part but still lose business if defect rates vary, input costs are high or customs procedures delay shipments. India must therefore treat manufacturing policy as an ecosystem problem. Power quality, port dwell time, industrial land, testing laboratories, skilled technicians and contract enforcement matter as much as subsidy rates. A finance ministry notification cannot compensate for a truck waiting at a state border or a machine remaining idle because a specialist visa is delayed.
Why Chinese brands still dominate
Chinese smartphone brands remain formidable in India because they understand distribution, pricing and product cadence. They built relationships with offline retailers, offered aggressive financing, localised software and refreshed models quickly across price bands. Their supply chains provide access to components and designs at a speed few rivals match. Indian consumers are not betraying the nation when they buy the best device within a budget. Patriotism does not improve battery life.
The policy response should not be to make Chinese products artificially bad choices forever. It should be to make production in India globally attractive and encourage more research, design and supplier ownership here. Security and compliance rules must be enforced consistently, but vague hostility creates uncertainty for workers and vendors as well as foreign firms. Chinese brands already assemble extensively in India and purchase some local inputs. The state should use market access to encourage deeper localisation while preserving competition. Consumers suffer when industrial policy becomes a shelter for mediocre domestic products.
Indian champions cannot be appointed
There is understandable desire for an Indian smartphone brand to compete globally. Governments, however, are poor casting directors. A company does not become globally competitive because a minister calls it a champion. It needs intellectual property, patient capital, supplier leverage, after-sales service and products people voluntarily choose. Past Indian handset brands often depended heavily on imported designs and struggled when Chinese rivals integrated more tightly with manufacturing. Reviving a logo without rebuilding capability would repeat the mistake.
India may create stronger firms in less glamorous layers first: power electronics, enclosures, industrial design, testing equipment, embedded software, repair networks or specialised components. These businesses can sell across brands and markets. Policy should reward export competitiveness and technological learning rather than insisting that success must look like an Indian logo on a flagship phone. National capability can reside deep inside a product.
Skills and working conditions are part of value addition
Factory-job announcements usually count heads without describing careers. Electronics plants need operators, maintenance technicians, quality engineers, toolmakers and production managers. Training must move beyond short induction courses toward recognised qualifications that travel between employers. Women form a major share of electronics-assembly workforces in several clusters; safe transport, predictable shifts, housing and grievance systems are industrial infrastructure, not corporate charity.
India should measure wage progression and supervisory promotion alongside job creation. A sector that traps workers in permanently low-skill roles is less transformative than one that builds technical careers. Incentive agreements can require reporting without micromanaging salaries. Transparency would show whether public money creates durable human capital.
Protection needs an expiry date
Tariffs can encourage local production, but they also raise device prices and protect inefficient inputs. The government should publish a predictable glide path tied to capability milestones. Firms invest when rules are stable; consumers benefit when protection does not become permanent rent. Imported production equipment and inputs unavailable domestically should move quickly through customs. The goal is competitive exports, not a walled market where Indian buyers finance inefficiency.
Evaluation must ask counterfactual questions. Would the investment have occurred without the incentive? How much domestic value was added? Did suppliers win customers beyond the subsidised anchor company? What happened after support ended? These answers may be uncomfortable, which is precisely why they matter.
The next phase
India has moved beyond merely importing finished phones. That achievement deserves recognition. The government’s production-linked strategy helped create momentum, while firms responded to a vast market and changing global supply chains. But assembly is a platform, not a finish line. Components, equipment, design, skills and supplier scale will decide whether the sector remains dependent on imported technological cores.
I support the component scheme because it aims at the right layer. I will judge it by domestic value, exports, worker progression and unsubsidised competitiveness—not by investment promises stacked at a press conference. Chinese brands dominate because they are embedded in a mature ecosystem. India will not defeat that advantage through indignation. It can build an alternative through patient, measurable industrial competence. Slogans opened the door; yield rates, logistics and engineers must now walk through it.
