Electronics Manufacturing Services: India Ems: Scaling Into a Multi-Year Upcycle

India’s EMS industry remains at an early stage of global penetration with ~4-5% market share and is rapidly emerging as a key pillar of the electronics ecosystem, supported by strong growth momentum and multiple long‑term tailwinds. The sector delivered a robust 24% revenue CAGR over FY19–24, with growth expected to accelerate further to 27% CAGR over FY24–29E. Key drivers include PLI incentives, China+1-led supply‑chain diversification, rising domestic electronics demand, increasing labor costs in competing regions, and a growing preference among global OEMs for outsourced manufacturing. While India’s electronics manufacturing base has expanded steadily, dependence on imported components remains a key constraint. To address this, the government has introduced targeted initiatives such as the Electronics Component Manufacturing Scheme and the Semiconductor Mission to catalyze investments, deepen domestic value addition, and enhance global competitiveness. As backward integration gains traction, India’s EMS sector is positioned for faster growth, supported by improving cost efficiency and a structurally rising export contribution. Syrma SGS is our top pick in the sector.

India’s EMS industry poised for strong growth: The India’s EMS industry forms a critical part of the country’s large electronics ecosystem. The industry has demonstrated strong growth in past couple of years, recording a 24% revenue CAGR over FY19–24, with momentum expected to accelerate to 27% CAGR during FY24–29E. This expansion is being driven by multiple structural tailwinds, including government incentive schemes, global OEMs adopting a China+1 strategy to diversify supply chains, rapid growth in domestic electronics consumption, rising labor costs in competing geographies, and an increasing preference among large OEMs to outsource manufacturing.

Component and semiconductor manufacturing – next growth frontier: India’s electronics manufacturing base has expanded steadily; however, it continues to be structurally reliant on imported components, with China (including Hong Kong) accounting for 54% of total imports in FY25. To mitigate this dependence, the government has rolled out the Electronics Component Manufacturing Scheme and the Semicon Mission to catalyze investments, enhance domestic value addition, and strengthen India’s competitiveness in the global electronics ecosystem. Consequently, EMS players are stepping up investments in high‑value components, marking a strategic shift that could drive margin expansion, improve cost economics, and position India for the next phase of electronics manufacturing growth.

Export-led structural growth tailwind: India’s EMS export opportunity is being boosted by a sustained surge in electronics exports over the past decade. Electronics have scaled rapidly from the seventh-largest export category in FY22 to the third-largest in FY25, further advancing to the second place in H1FY26. Export value has expanded nearly nine-fold from INR 0.4trn in FY15 to INR 3.3trn in FY25, delivering a robust 24% CAGR. This structural export upswing, reinforced by PLI incentives, global supply-chain reallocation, and increasing OEM outsourcing, creates a compelling long-term growth runway for India’s EMS players.

Key risks: (1) Adverse changes, delays, expiry of incentive schemes; (2) continued reliance on imported components exposes firms to supply disruptions and forex volatility; (3) Indian EMS players lag China/Vietnam peers in scale and cost competitiveness; (4) delays in component manufacturing scale‑up may constrain growth and margin expansion.

Source: HSIE Report: April 06 2026