India's factory story is now electronics and defence

For years, India's manufacturing ambitions were measured against targets that kept slipping. The latest government figures read differently. Mobile phones became the country's single largest export in 2025–26, defence production reached a record, and approved investment is moving from final assembly into components and chips. Global companies looking to diversify supply chains are a large part of the reason.

From assembly line to largest export

India's electronics production rose from about ₹1.9 lakh crore in 2014–15 to ₹11.3 lakh crore in 2024–25, a six-fold increase. Exports grew faster still, from ₹38,000 crore to ₹4.24 lakh crore in 2025–26. Mobile phones carried most of that: production went from ₹18,000 crore to ₹6.27 lakh crore, exports from ₹1,500 crore to ₹2.59 lakh crore, and the number of phone factories from two to about 300. The government credits the sector with about 12 lakh jobs, 70% of them held by women.

India's electronics exports

₹ lakh crore, financial years

The production-linked incentive scheme for large-scale electronics did much of the work. By the government's count it has drawn ₹13,107 crore of investment and supported ₹8.56 lakh crore of production, ₹4.65 lakh crore of it exported.

Components are the next stage

Final assembly creates volume but captures little value. The Electronics Components Manufacturing Scheme, with an outlay of ₹40,000 crore, is meant to change that. It attracted proposals worth about ₹1.15 lakh crore, and by January 2026 the government had approved 46 projects. The third tranche alone, 22 projects across eight states, carries ₹41,863 crore of planned investment and about ₹2.58 lakh crore of expected output, covering parts for phones, telecom, cars and IT hardware.

Chips are the layer below that. Under the India Semiconductor Mission, 12 projects worth about ₹1.64 lakh crore have been approved, nine of them assembly and packaging units, and the electronics minister has said four units will begin commercial production during 2026. We look at the global chip market these plants are entering in our note on the memory-led boom.

Defence: record output, a bigger private share

India's defence production reached a record ₹1.78 lakh crore in 2025–26, up 15.6% on the year and more than double the 2020–21 level. Defence public sector undertakings still make most of it, but the private sector's share rose to 24%, about ₹42,000 crore.

India's defence production

₹ lakh crore, financial years

Exports moved even faster. Defence exports rose 63% in 2025–26 to ₹38,424 crore, sold to more than 80 countries, and private companies accounted for 45% of them. The number of registered defence exporters rose from 128 to 145 in a year.

India's defence exports

₹ thousand crore, financial years

Where the opportunity sits

Component suppliers are the clearest gap. Printed circuit boards, camera and display modules, batteries, passive components and enclosures all now carry government support and have large anchor buyers already assembling in India.

Contract manufacturers and their supply chains benefit as global brands move capacity, and the second and third tiers of suppliers are where most of the new firms and jobs will be.

Defence is opening to private suppliers at the sub-system and component level, in maintenance and repair, and in exports, where private firms already supply nearly half.

Foreign companies can enter through joint ventures, technology partnerships or as suppliers to Indian prime contractors, which is often the faster route than greenfield investment.

What this means for leaders

• Follow the anchor buyers. Component demand in India is concentrated around a small number of large assembly sites. Location and supplier qualification matter more than headline incentives.
• Read incentives as a bridge, not a business case. Schemes tied to output and investment help cover early cost gaps. Plants still need to compete on cost and quality when support tapers.
• Plan for qualification time. Electronics and defence buyers take months to years to approve a new supplier. Build that into investment timelines.
• Treat India as an export base. The fastest growth in both sectors is in exports, which means global quality and compliance standards from the first day.

India's manufacturing push has moved from promise to export statistics. The next test is whether value follows volume down the supply chain.

Figures are as published by the sources above at the time of writing. Forecasts and company guidance are labelled as such and will change.

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