Competing with China Plus One alternatives like Vietnam demands more than incentives; it requires tackling India’s persistent “disability costs.” Logistics expenses in India run at roughly 14 percent of GDP, compared to eight percent in rival manufacturing destinations.
The 19 sanctioned greenfield Electronic Manufacturing Clusters, supported by the Gati Shakti initiative, aim to provide plug-and-play environments that compress time to market. But for India to truly scale, these clusters must evolve beyond offering land and power. The introduction of Common Facility Centres is critical—shared spaces where small and medium enterprises can access sophisticated R&D and testing equipment that would otherwise remain beyond their reach.
Beyond physical infrastructure, deliberate investment is needed in the softer sinews of an ecosystem. This means programmes that help domestic suppliers meet the exacting quality standards of global manufacturers, financing mechanisms that allow smaller firms to scale up without being crushed by working capital constraints, and sustained commitment to building specialised skills. Engineering colleges and polytechnics must be drawn into closer partnership with industry, not merely to supply warm bodies for assembly lines, but to produce the process engineers, materials scientists, and design specialists who can solve problems on the fly. These investments are less glamorous than a new fab announcement, but without them, the clusters risk remaining islands of foreign manufacturing surrounded by a sea of imports.
The chapter ahead
India’s electronics story is entering its second chapter. The first was about size—scaling up production, attracting global manufacturers, creating jobs. The next must be about depth. Policy must shift from volume-based incentives to innovation-based ones. The metrics that matter should evolve from units shipped to local content percentage, from final assembly to components and semiconductors, from semi-skilled assembly lines to high-skilled R&D and engineering teams.
To reach the ambitious target of $300 billion in electronics production by 2026, India cannot simply assemble its way forward. It must learn to fabricate, design, and innovate. The “Assembled in India” label was a necessary starting point. “Made in India”—in the truest sense—remains the destination.
Authored by S.Ravi
Founder Ravi Rajan and company Former BSE chairman
