The core tension: explosive output growth, falling value capture
Electronics is among the fastest-scaling sectors reviewed by almost any raw measure: factories grew from 2,351 to 2,516 (2014-15 to 2023-24), but Gross Value of Output rose more than four-fold, from ₹1.22 lakh crore to ₹5.24 lakh crore over the same window, a rate of expansion no other sector reviewed comes close to matching. Firm-level financials have improved too: PAT margin rose from 1.9% (2014-15) to 4.7% (2024-25), and ROE from 5.0% to 15.5%.
But the value-added share of that output fell from 19.4% to 13.2% over the decade, and materials consumed as a share of GVO rose from 50.4% to 72.8%, the clearest possible signature of a sector whose growth runs overwhelmingly through final assembly rather than component fabrication or design. R&D spend, instead of rising alongside the investment boom, fell from 0.66% of sales to 0.33%, moving the wrong direction even as output surged. The firm structure has stayed comfortably inside the Competitive HHI band throughout the decade, with further de-concentration from a 2019-20 peak of 933.5 down to 627.5 by 2024-25. On the IIP, Electronics ranks 4th of 10 sectors on latest growth but only 5th on long-run CAGR and 2nd-most volatile, a sector that grows in bursts rather than steadily, and whose 2025-26 index level (142.2) still sits 15.7% below its 2018-19 peak (168.7).
Trade: the largest deficit after Metals, and still widening
Unlike Textiles, Electronics is not a net export sector, it runs a structural and widening trade deficit. Exports grew fast in FY24-25 (36.1% YoY, ₹3.04 lakh crore, driven overwhelmingly by smartphones at ₹2.05 lakh crore of export value on their own), but imports, at ₹7.67 lakh crore, are more than double exports and grew a further 13.1% on an already much larger base. Import dependency stands at 71.6% of consumption. China alone supplies ₹2.95 lakh crore of imports, roughly 4x the next-largest import partner (Hong Kong). The firm-level financials point the same way, more starkly: aggregate Net Forex has been negative every year in the series, including −₹1.19 lakh crore in 2024-25.
Investment: a private-sector boom, with a sharp project-completion pullback
Investment in Electronics is almost entirely private-sector-led and has grown at a pace that dwarfs most other sectors reviewed: new investment announced reached ₹2.09 lakh crore in 2024-25, down from an unusually large ₹3.48 lakh crore in 2023-24. Total outstanding investment stock stood at ₹10.99 lakh crore across 374 projects. Dropped-investment project count rose from 9 (2022-23) to 16 (2023-24) to 65 (2024-25) to 85 (2025-26), a near ten-fold rise in three years. The PLI scheme for large-scale electronics manufacturing carries the largest single allocation of the government's 14-sector programme (₹38,645 crore total outlay), against roughly ₹8,282 crore actually invested by approved companies as of mid-2024, a wide gap between committed scheme size and realised spend that mirrors the pattern seen in other PLI-covered sectors.
Geography: a new industrial map
Electronics geography looks different from most other manufacturing sectors reviewed: Uttar Pradesh, driven almost entirely by the Noida / Greater Noida mobile-assembly cluster, is the single largest state by GVO share (30.4%), ahead of Tamil Nadu (28.8%) and well ahead of the traditional western-and-southern manufacturing belt. Tamil Nadu's Sriperumbudur–Oragadam corridor is the more export-oriented and diversified of the two leading hubs, hosting Foxconn, Dell, Samsung and Nokia's Indian operations. Karnataka (10.1% GVO share) is smaller by volume but distinct in character, more design- and defence-electronics-oriented, anchored by Intel, Qualcomm, and Bharat Electronics.
Clusters: led by named anchor firms
Four major clusters stand out, each organised around specific anchor firms: Sriperumbudur–Oragadam (Foxconn, Dell, Samsung, Nokia), Bengaluru's design-and-defence belt (Intel, Qualcomm, Bharat Electronics), Noida/Greater Noida (Oppo, Vivo, Samsung, Dixon) and Pune.
R&D: a laggard moving the wrong direction
R&D spend as a share of sales fell from 0.66% (2014-15) to 0.33% (2024-25), squarely in the "laggard" band (below 1%) and declining even as the sector's output and investment both surged. This is the clearest quantitative marker in this series for the assembly-not-innovation character of the sector's growth: R&D intensity is concentrated in a handful of defence-electronics and specialty medical-device firms (Relisys Medical Devices at 10.56% of sales, Bharat Dynamics at 6.66%, Bharat Electronics at 5.95%), all comfortably in the "Leader" band, while the large-volume assemblers that dominate the sector by revenue (Foxconn, Oppo, Vivo, Samsung) report negligible or unreported R&D spend.
Explore the sector: interactive mindmap
Electronics is the sector reviewed with the clearest gap between headline scale and underlying value capture: output has quadrupled, investment is booming, and concentration has fallen sharply as new assemblers have entered, but the value-added share of output is shrinking, R&D intensity is falling, the trade balance is a large and widening deficit, and the latest year shows a sharp deterioration in investment-project completion. The PLI programme is explicitly designed to reward production scale, and on that narrow metric it is working; whether it shifts the sector's underlying economics toward component manufacturing, design, and export-net-positive trade is the open question the next few years of data will answer.
References
Methodological Notes
Institute of Manufacturing and Economy · Sector Snapshots · August 2026 · NIC Division 26 · Primary research: Harsh Dalal · Compiled by: Riddhi Bhargava
Author's Profile
Harsh Dalal is a BSM (Honours) student in Finance and Economics, Class of 2029. He interns at the Institute of Manufacturing and Economy and conducted the primary research for this sector snapshot.