India needs to strengthen its electronics manufacturing sector by addressing structural cost challenges, leveraging free trade agreements (FTAs), and promoting the production of strategic components, according to NITI Aayog’s Trade Watch Quarterly report.
The report highlights that India’s electronics exports remain limited despite the global market reaching $4.6 trillion, with India holding only about 1% market share in 2024. Major high-tech segments, such as integrated circuits and semiconductors, continue to be dominated by China, Hong Kong, and Taiwan.
Transition from Assembly to Component Manufacturing
The report emphasizes the need for India to shift from assembly-led growth to component-focused manufacturing. Strengthening domestic value addition, encouraging sustained R&D, and facilitating technology transfers through anchor investments are key strategies to enhance competitiveness.
“Aligning incentives toward local manufacturing, ecosystem deepening, and technology-driven standards can create stable demand for domestic suppliers,” the report noted.
Strengthening Market Access and Trade Facilitation
India should leverage FTAs and improve integration into global value chains through:
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Predictable government procurement
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Export finance support
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Regulatory simplification
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Participation of MSMEs
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Higher domestic value addition
These measures aim to support India’s vision of a $500 billion manufacturing ecosystem by FY2030 and enhance its position in global electronics markets.
Export Trends and Key Markets
According to the report, India’s export growth from 2015 to 2024 has been concentrated in telecom and mobile phones, while components like chips and semiconductors showed minimal gains.
Currently, India’s electronics exports are primarily directed to the USA, UAE, and Netherlands, with mobile phones accounting for 52.5% of exports. Other items such as power equipment and wires contribute smaller shares. Imports are dominated by integrated circuits (23.7%), mobile phones (17.5%), and data-processing machines (10.6%).
Emerging Drivers: Cross-Border E-Commerce
The report also highlights cross-border e-commerce as a key driver for future export growth. Electronics are expected to play a central role in India’s goal to increase merchandise exports by 2030.
In the July-September quarter, exports led trade growth, with merchandise and services exports rising about 8.5% year-on-year, outpacing imports. Exports to top markets, including Hong Kong, China, and the U.S., showed strong growth, while imports from the UAE surged 48% YoY.
India’s Free Trade Agreements
India recently concluded negotiations for a proposed FTA with the European Union (EU), marking its 19th trade agreement. The pact is expected to boost exports to the 27-nation EU bloc.
Since 2014, India has finalized seven major trade pacts:
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Mauritius (April 2021 implemented)
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Australia (December 2022 implemented)
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UAE (May 2022 implemented)
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Oman (signed December 2025)
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United Kingdom (signed July 2025)
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EFTA – Switzerland, Iceland, Liechtenstein, Norway (implemented October 2025)
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New Zealand (talks concluded December 2025)
These agreements aim to improve market access and strengthen India’s electronics and high-tech exports globally.
Conclusion
NITI Aayog’s report underscores that proactive policies, FTA leverage, and a focus on strategic component manufacturing are crucial for India to emerge as a globally competitive electronics hub.
By emphasizing domestic value addition, MSME participation, and trade facilitation, India can accelerate its electronics exports and achieve long-term economic growth.
