India is rapidly strengthening its position as a global manufacturing hub, with electronics value addition rising from 30% to nearly 70%, and projected to reach 90% by FY27, according to Axis Capital. Mobile phone exports have surged 77 times in a decade, while imports of fully built air conditioners have fallen from 35% in FY19 to just 5% in FY25.
India is fast emerging as a key global manufacturing hub, with a significant rise in value addition across sectors like electronics, mobile phones, and consumer durables. According to a report by Axis Capital, the country’s value addition in electronics manufacturing has witnessed an impressive jump from 30% to nearly 70%, and is projected to touch 90% by FY27.
The government’s focused push through policy interventions and incentive schemes has played a crucial role in driving this growth. “With a new components policy in place, the country is aiming to increase value addition from the current 15-16% to 40-50%.” This policy is expected to encourage domestic manufacturing of critical components, reducing the industry’s dependence on imports and strengthening the local manufacturing ecosystem.
The mobile phone sector has particularly seen a phenomenal expansion over the past decade. “Mobile phone exports have grown 77 times in the last 10 years.” This sharp surge reflects India’s growing capability in not just assembling but also manufacturing and exporting devices at scale.
Another critical sector where India has made notable progress is consumer durables, especially air conditioners. The country has successfully reduced its imports of completely built units (CBUs) over the years. “India has cut down its imports of fully built air conditioners (CBUs) from 35% in FY19 to just 5% in FY25.” This sharp fall in imports has been made possible by enhancing domestic manufacturing capacity for key components. “Key parts like compressors, copper tubes, and aluminum coils are now being made in India.“
The government’s efforts to promote self-reliance or ‘Atmanirbhar Bharat’ in manufacturing have resulted in a paradigm shift in how industries operate. Companies are increasingly investing in local sourcing, building new capacities, and developing supply chain linkages within India. This strategy not only reduces import dependency but also boosts employment generation and technological capabilities in the country.
“With a new components policy in place, the country is aiming to increase value addition from the current 15-16% to 40-50%.” The emphasis on components manufacturing is crucial because while final product assembly has seen significant growth, a large share of components was still being imported until recently. The policy is designed to bridge this gap by encouraging investments in the domestic production of critical parts like semiconductors, displays, batteries, and other electronic components.
Simultaneously, India’s mobile phone exports tell a story of successful scale-up and competitiveness in the global market. “Mobile phone exports have grown 77 times in the last 10 years.” This growth reflects both the expansion of manufacturing capabilities and the ability to meet global quality standards.
The air conditioner segment is another example of this transformation. “India has cut down its imports of fully built air conditioners (CBUs) from 35% in FY19 to just 5% in FY25.” By focusing on manufacturing key parts like compressors, copper tubes, and aluminum coils domestically, India has been able to sharply reduce its reliance on foreign suppliers. “Key parts like compressors, copper tubes, and aluminum coils are now being made in India.“
Overall, India’s manufacturing landscape is undergoing rapid transformation, driven by supportive policies, increasing investments, and rising export competitiveness. The government’s vision to boost value addition and develop a robust components ecosystem is expected to play a pivotal role in further strengthening India’s position as a global manufacturing powerhouse over the next few years.
