Despite electronics emerging as one of India's largest export categories, the country continues to remain heavily dependent on imports, with electronics imports exceeding exports by nearly 2.4 times in FY26.
According to data from the Commerce Ministry, India's electronics exports stood at $47.69 billion during April 2025-March 2026, while imports were significantly higher at $116.18 billion, resulting in deficit of $68 billion. Electronics accounted for nearly 11% of India's total exports and about 15% of the country's import basket during the year.
Industry executives say the widening trade gap is less a consequence of rising imports and more a reflection of India's inability to scale exports due to low domestic value addition and the absence of dedicated manufacturing ecosystems.
Imports of electronic goods grew more than 17% during FY26, with accumulators and batteries registering the sharpest increase of nearly 51%. China remained the dominant source of imports, accounting for around 38% of India's imports of electronic instruments.
According to the India Cellular & Electronics Association (ICEA), increasing imports is not necessarily a concern if they support export-oriented manufacturing. The larger challenge, however, is India's limited domestic value addition (DVA), which constrains its ability to move up the global electronics value chain.
ICEA estimates that domestic value addition in electronics manufacturing currently stands at only 18-20%. To emerge as a major global electronics manufacturing hub, India will need to raise DVA to 35-40% over the next five years.
Industry leaders argue that a strategy focused solely on import substitution may not deliver sustainable gains and could undermine competitiveness.
"Because import substitution normally accompanies protection, and protection is equal to non-competitiveness. The important thing is that you should have large exports. We are now targeting electronics exports of $180-200 billion by 2030," said Pankaj Mohindroo, Chairman, ICEA.
Another key challenge is India's limited integration into global value chains (GVCs), which dominate international electronics trade. Industry executives point out that while companies such as Apple have successfully integrated India into their global supply chains, such examples remain rare.
Exporters argue that many multinational corporations continue to operate in India primarily to serve the domestic market rather than using the country as a manufacturing and export hub. As a result, India has not been able to fully leverage global production networks to boost exports and improve its trade balance.
Industry stakeholders say dedicated electronics manufacturing clusters, stronger supplier ecosystems and deeper participation in global value chains are essential for increasing exports and enhancing competitiveness.
A recent report by NITI Aayog echoed similar concerns, arguing that India's electronics strategy must transition from assembly-led growth to component-led manufacturing.
The government think tank said future incentives should increasingly focus on domestic value addition, sustained research and development, and ecosystem development. It also recommended attracting anchor investments that can facilitate technology transfer, improve manufacturing standards and create stable demand for local suppliers.
