India's electronics manufacturing services (EMS) market could surpass $150 billion by FY30, according to a report released on Monday, 8 June by KPMG in India. The sector, which has expanded nearly fourfold in five years, now stands at a critical juncture — scale has been built, but deeper value-chain integration remains elusive.

Rapid Growth, but a 'Scale Without Depth' Problem

The KPMG report estimates India's EMS market grew from roughly $10–12 billion in FY20 to $40–45 billion in FY25, fuelled by domestic demand, government policy support, and the global China+1 supply-chain diversification strategy. Yet the consultancy flags a structural paradox: while India dominates high-volume assembly — particularly in mobile phones and consumer electronics — its footprint in higher-value segments such as design, component manufacturing, and intellectual property (IP) ownership remains thin.

'Amid a once-in-a-generation rewiring of global electronics supply chains, driven by geopolitics, resilience priorities and rising technological complexity, India's EMS market is at a critical inflection point — where scale has been built, but value chain depth remains limited,' the report stated.

India's Share in a Trillion-Dollar Global Market

KPMG pegs the global EMS market at $640–650 billion in 2025, with projections that it could exceed $1 trillion by the early 2030s, driven by connectivity, electrification, and original equipment manufacturers (OEMs) outsourcing more production. India currently accounts for just 5–6 per cent of global EMS manufacturing, signalling significant headroom for expansion if structural constraints are addressed.

Notably, India has received roughly $19.5 billion in cumulative policy incentives to support its electronics sector — a figure that underscores the Centre's commitment but also raises questions about sustainability as those incentives begin to taper.

Structural Constraints Holding Back Value Addition

The report identifies import dependency as the sector's most persistent bottleneck, with critical components sourced from abroad at a rate of 80–95 per cent across key categories. This limits domestic value addition and compresses margins for Indian EMS players. Analysts cited in the report argue that India must pivot from assembly-led growth to design-led and system-level capabilities, making engineering depth, supply-chain sophistication, and product development core strategic priorities.

Rohan Rao, Partner, Automotive and Lead, Electric Mobility, KPMG in India, said: 'India's EMS sector has reached a pivotal moment with firm foundations of scale, but the next phase of growth will be defined by depth. Realising India's potential will require sustained investment in component ecosystems, engineering depth, and supply chain sophistication to unlock higher value participation in global electronics manufacturing.'

What Needs to Happen Next

The report calls for coordinated action across government, EMS players, and global OEMs over the next five to ten years. Key priorities include building domestic component ecosystems, strengthening workforce capabilities, investing in engineering and design, and deepening integration across the value chain. The window is narrow: as policy incentives taper, organic capability-building must accelerate to sustain growth momentum.

With global supply chains continuing to shift away from single-source dependence, India's ability to move up the electronics value chain in the next three to five years will determine whether it captures a transformative share of a trillion-dollar market — or remains a high-volume, low-margin assembler.