India's Electronics Export Surge: A Structural Shift Powered by Policy, Industry and MSME Potential

India’s electronics exports are experiencing an inflection point. In the first quarter of FY2025-26 (April–June 2025), outbound shipments of electronic goods surged by an impressive 47% year-on-year to reach $12.41 billion. This growth is not a one-off spike, but a continuation of a structural transformation taking shape over the past five years, one anchored in manufacturing reform, strategic global positioning and a new-found emphasis on deepening the domestic value chain.

Key Trends

India’s electronics exports have grown more than six-fold over the past decade, with recent years showing an accelerated pace. Smartphone exports alone crossed ₹2 lakh crore ($24 billion) in FY2024-25, up from negligible levels a decade ago. The largest export segment continues to be mobile phones and telecom equipment, followed by consumer electronics and IT hardware.

The United States remains India’s top destination for electronics exports, accounting for over 60% of shipments in Q1 FY26. The UAE and China follow, along with a growing share of European markets such as the Netherlands and Germany. The expansion is not only geographical but also structural India is moving up the value chain from assembly to greater integration into global supply networks.

Among states, Tamil Nadu leads the pack, contributing 41% of India’s electronics exports in FY2024-25, followed by Karnataka and Uttar Pradesh. This shift reflects robust state-level industrial policies and the clustering of major contract manufacturers.

Government Initiatives

National-Level Interventions

The Ministry of Electronics and IT (MeitY) and the Ministry of Commerce have been instrumental in architecting India’s electronics success story.

Production-Linked Incentive (PLI) Scheme: The PLI scheme for large-scale electronics manufacturing has catalysed ₹7.16 lakh crore in production and ₹3.90 lakh crore in exports as of February 2025. The FY25 Union Budget further expanded PLI allocations, signaling policy continuity and scale.
Electronics Components Manufacturing Scheme (ECMS): Launched in April 2025, this scheme aims to boost the production of passive components and capital equipment through customized incentive structures. It is designed to reduce import dependence and deepen India’s component ecosystem.
Modified Electronics Manufacturing Clusters (EMC 2.0): With plug-and-play infrastructure, EMCs aim to provide ready-to-operate facilities, particularly for MSMEs. The recently approved ₹417 crore cluster in Greater Noida is a template for future-ready, skill-integrated industrial parks.
Semicon India Program: This ₹76,000 crore initiative underlines India’s ambition to become a semiconductor manufacturing hub, with long-term implications for electronics self-reliance.

State-Level Push

Tamil Nadu has emerged as a model state with its recently announced Electronics Policy 2025, which aligns with central schemes and offers additional capital subsidies and ease-of-doing-business measures. Karnataka, Uttar Pradesh and Telangana also offer substantial policy support in the form of land, power and financing assistance.

Industry Bodies: Aligning Stakeholders with National Objectives

India’s electronics growth narrative is also supported by industry associations such as:

ICEA (India Cellular & Electronics Association): Co-authored the government’s Vision 300 billion roadmap, targeting $300 billion in electronics manufacturing and $120–140 billion in exports by 2025–26.
ELCINA (Electronic Industries Association of India): Advocates for a $10 billion component-centric incentive package to bolster high-value exports. The association emphasizes the need for innovation, IP creation and strategic global positioning.
ESC (Electronics and Computer Software Export Promotion Council): Acts as a vital interface between exporters and government, organizing international trade fairs and capacity-building programs.

The Role of MSMEs

India’s electronics ecosystem cannot thrive without the active participation of MSMEs. These enterprises have the potential to plug into supply chains, innovate in niche segments and enhance localized value addition.

Component Manufacturing: MSMEs can supply PCBs, connectors, cables and specialized assemblies to OEMs. With PLI and EMC frameworks creating demand visibility, MSMEs have a predictable roadmap to scale.
Export Enablement: Through initiatives like Market Development Assistance and MSME Export Promotion Councils, small firms can access new markets. Participation in trade fairs and e-commerce platforms further democratizes global access.
Technology & Skill Upgradation: Common Facility Centres within EMCs offer MSMEs access to testing labs, certification services and prototyping tools. This lowers the cost of quality compliance and accelerates innovation.
Supply Chain Integration: With increasing localization norms and anchor-led manufacturing, MSMEs can form consortia or act as Tier 1/Tier 2 suppliers. Clusters such as those in Noida, Hosur and Sriperumbudur are prime grounds for such integration.

Strategic Outlook

India’s rapid electronics export growth signals a coming-of-age moment. However, sustaining this momentum will require:

Accelerated component ecosystem development
Diversification into high-value sectors like medical electronics and IoT
Deeper integration into global value chains through FTAs and logistics upgrades
Continued policy stability and ease of doing business

With platforms like PLI, ECMS, and EMC 2.0, and the active participation of state governments and industry bodies, India has laid the groundwork for a sustainable electronics manufacturing and export economy. The next step is to make this journey inclusive by equipping MSMEs with the tools, financing and policy support they need to drive the next wave of exports.

The 47% surge in electronics exports in Q1 FY2025-26 is more than just a number it reflects the success of a cohesive national vision. From ministries and associations to startups and MSMEs, a broad coalition is enabling India’s emergence as a global electronics powerhouse. As this ecosystem matures, the country stands well-poised not just to meet, but to redefine the global electronics export narrative.