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India’s electronics manufacturing - structural growth story aided by value addition, and backed by government support

ICICIdirect Research 10 Jul 2026 DISCLAIMER

India’s electronics manufacturing industry is in a multi-year growth phase, supported by favourable government policies, rising exports and increasing localisation. Electronics production has surpassed ₹13 lakh crore in FY26, while the government aims to expand the sector to ~$500 billion (~₹45 lakh crore) by FY30, positioning India as a global manufacturing hub.
Despite the strong growth, domestic value addition remains relatively low at ~18–20%, reflecting heavy reliance on imported components such as semiconductors, PCBs, displays and camera modules. However, schemes such as ECMS, the upcoming ISM 2.0 and expected PLI 2.0 are expected to accelerate component manufacturing, improve localisation and gradually reduce import dependence over the medium term. Union minister Ashwini Vaishnaw has highlighted government projects electronics manufacturing value addition to increase to ~38% within next 5 years.
India continues to import over ~$116 billion worth of electronics annually, with China remaining the largest sourcing destination. At the same time, electronics has emerged as India’s third-largest export category, driven primarily by smartphones, while the government targets it to become the second-largest export sector. The emergence of domestic component manufacturing is expected to further strengthen export competitiveness, with India’s PCBA exports growing 20-fold to ~ $1.9 billion in FY26.
Policy support remains favourable, with the Centre extending customs duty concessions on a range of machinery and components used in electronics manufacturing until March 31, 2029. The relief covers machinery for lithium-ion battery manufacturing, display assembly components for automotive and medical applications, wireless charging components for mobile phones. These measures are expected to lower manufacturing costs, encourage fresh investments and improve domestic value addition.
Within our coverage, Syrma SGS and Amber Enterprises are expanding into PCB and copper-clad laminate manufacturing, Kaynes Technology is building capabilities in PCB manufacturing and OSAT, Dixon Technologies continues to deepen backward integration through camera modules, display modules and enclosures, while PG Electroplast is investing in compressor manufacturing to strengthen localisation in room air conditioners. Collectively, these investments position the companies to benefit from India’s transition from an assembly-led ecosystem to a higher value-added electronics manufacturing base. We have BUY rating on Dixon (TP: ₹16,300), Amber Enterprises (TP: ₹8,250), Syrma SGS (TP: ₹1,550), PG Electroplast (TP: ₹675), Epack durable (TP: ₹285) and Cyient DLM (TP: ₹650).

Dixon Technologies: Govt clears Vivo JV; A Growth Catalyst & Regulatory Relief…
The Government has approved Dixon’s 51:49 joint venture with Vivo India under Press Note 3, removing the key regulatory overhang. The JV is expected to manufacture over 2 crore smartphones annually, absorbing nearly two-thirds of Vivo India’s domestic production. This could translate into an incremental revenue opportunity of ~₹30,000 crore at full scale, aided by Vivo’s higher ASP portfolio.
This partnership significantly strengthens Dixon’s leadership in Android smartphone EMS while providing meaningful volume growth beyond its existing base. Further, increased scale along with backward integration into camera modules, display modules and enclosures is expected to improve value addition and support margin expansion over the medium term.
We maintain our BUY rating on Dixon Technologies with target price of ₹16,300.

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