After India's EMS Quadrupled in Five Years, How to Cross the Deep Water Zone of the Value Chain?

From Cost Optimization to Resilience Priority: The Global EMS Landscape Is Being Redrawn

Over the past two decades, the global electronic manufacturing services (EMS) industry built an极致 cost-efficiency system centered on China. But geopolitical tensions, trade policy volatility, and supply chain disruptions are forcing OEMs worldwide to rethink their production footprints. The traditional single-hub model is being replaced by multi-hub, distributed manufacturing networks—with Southeast Asia, India, and Mexico each playing distinct roles. The role of EMS providers is also shifting, upgrading from mere contract manufacturers to strategic partners that help customers design and manage risk-diversified supply chains.

This structural reset has opened an unprecedented window for India.

India's EMS Acceleration: An Industrial Leap Behind the Numbers

According to the latest KPMG India report, India's EMS market has surged from roughly $10–12 billion in FY2019–20 to $40–45 billion in FY2024–25—nearly quadrupling in five years. This growth is no accident; it is the combined result of the government's PLI scheme, domestic consumption expansion, and integration into global export supply chains.

But another number is equally striking: India currently accounts for only 5–6% of global EMS output. This means that despite its impressive growth rate, India remains a relatively small player in the vast global electronics manufacturing landscape. It also precisely indicates that the future growth space is far broader than the achievements of the past.

Imbalance Between Scale and Depth: Structural Shortcomings Beneath the Glossy Data

India's EMS expansion has been concentrated mainly in mobile phones and consumer electronics, and dominated by low-value segments such as printed circuit board assembly (PCBA) and basic box-build assembly. Truly high-value design and manufacturing (ODM/JDM), advanced electronics, and precision engineering remain in their infancy. A key constraint is India's heavy dependence on imported components: 60–90% of the bill of materials (BOM)—including semiconductors, displays, PCBs, and passive components—must be sourced externally.

Meanwhile, logistics efficiency, certification infrastructure, and manufacturing productivity still lag significantly behind mature hubs such as China and Vietnam. These structural weaknesses mean that even with substantial production capacity, India struggles to develop genuine competitiveness in complex manufacturing.

The Next Decade: From Capacity Incentives to Capability Building

• The KPMG report argues that India's EMS must undergo a strategic shift in its next phase—from incentivizing capacity creation to building deep, sustainable capabilities. This requires progress across several dimensions simultaneously:- Local component ecosystem: Reduce import dependence on key components, raising domestic value-added from its currently low level to a target of about 40% by 2030.
• Advanced manufacturing technology: Introduce the automation, AI, and digital capabilities required by Industry 4.0.
• R&D and design: Transition from OEM manufacturing to design integration, cultivating ODM/JDM capabilities.
• Talent and skills: Cultivate engineers and technical workers who meet the needs of smart manufacturing.

At the government level, priority should be given to investing in infrastructure, certification systems, and targeted incentives for high-value areas. On the enterprise side, domestic EMS manufacturers should focus on design integration, niche market selection, and strategic M&A to secure high-profit segments. Global OEMs should genuinely embed India into their long-term manufacturing strategies, rather than treating it merely as a backup option.