Domestic brokerage firm Axis Capital maintains a positive outlook on India’s electronics manufacturing services (EMS) sector, citing the country’s emergence as a global manufacturing and export hub. This transformation is being driven by strategic government initiatives and substantial infrastructure investments.
The brokerage highlighted that India’s reduced corporate tax rate of just 15% for new manufacturing units is making the country an increasingly attractive destination in the global supply chain. Rapid expansion is evident in key areas like mobile phones, room air conditioners (RAC), and PCB assembly.
India Ranks Second in Mobile Manufacturing
India now ranks as the second-largest mobile phone producer, with nearly 99% of domestically sold phones manufactured within the country. Mobile phone exports have surged 77-fold over the past decade, a testament to India’s strengthening production capabilities. The focus is shifting toward value addition, which Axis expects to grow from the current 15–16% to 40–50%, supported by the upcoming components policy.
RAC Manufacturing Sees Significant Progress
The RAC sector has also experienced robust development. Imports of Complete Built-Up Units (CBUs) have dropped from 35% in FY19 to just 5% in FY25. This reduction has driven value addition in the sector from 30% to 70%, with projections to reach 90% by FY27. Axis notes that increased domestic production of key components—such as compressors, copper tubes, and aluminium coils—is playing a pivotal role in this shift.
