The report highlights the need to build on India’s existing electronics assembly base by expanding component manufacturing, semiconductor packaging and testing, mature-node chip production and commercialisation of domestic chip design. It identifies the next five years as a critical period for translating current momentum into sustained industrial competitiveness.
“India has built a world-class assembly base, and its semiconductor journey has begun. The opportunity now is to build depth on that foundation, in components, packaging and mature-node chips. The next five years will reward what customers qualify and reorder, and India is well placed to deliver on that,” said Santosh Tiwari, Founding Chair, Strat360 Private Limited.
According to the report, India’s electronics production reached an estimated Rs. 13.11 lakh crore in FY26, registering 15.8% growth from Rs. 11.32 lakh crore in FY25. Electronics exports touched Rs. 4.24 lakh crore, equivalent to about USD 47.96 billion, making electronics the country’s third-largest export category. Mobile phones emerged as India’s single largest export product.
The report also points to progress in semiconductor manufacturing under the India Semiconductor Mission. Five packaging and test units have started commercial production, marking the beginning of India’s operational semiconductor packaging and testing capabilities. Semicon 2.0, approved in July 2026 with an outlay of Rs. 1,27,500 crore, extends the support available for the sector.
Domestic component manufacturing is another area showing progress. By August 2026, the Electronics Component Manufacturing Scheme (ECMS) had approved 106 projects, with 38 plants reportedly producing. The report identifies ECMS as the most concrete route to increasing domestic value addition in mobile phones from an estimated 18-20% towards 35-40%.
However, the report argues that the next phase of growth will depend on expanding capabilities beyond assembly. Components, materials, equipment, front-end fabrication and the commercialisation of Indian chip design offer significant room for development. India’s first commercial fabrication plant, or fab, at Dholera, Gujarat, is expected to begin operations around mid-2028 at mature process nodes.
Looking ahead, the report identifies packaging and testing, component manufacturing, and selected mature-node and compound-semiconductor production as India’s most realistic opportunities over the next five years. These activities, it says, should be anchored to demand from the automotive, power, industrial and strategic sectors. It also recommends treating chip design as a commercialisation opportunity rather than measuring progress primarily through headcount.
The report sets out several policy priorities for converting recent progress into lasting competitiveness. It recommends measuring outcomes through qualified production, yields and domestic value addition alongside financial allocations and project approvals. It also calls for regular publication of audit-grade data covering customer qualification, order books and disbursements compared with actual expenditure.
Sustaining the momentum of ECMS to deepen domestic value addition is another priority. The report recommends communicating the expected mid-2028 start of the Dholera fab candidly as a mature-node facility and linking subsidies to time-bound milestones, with support gradually tapering as competitiveness improves.
It further emphasises the importance of customer participation in semiconductor manufacturing. According to the report, customer qualification, rather than construction alone, determines whether a manufacturing facility becomes commercially viable. It recommends drawing lessons from Vietnam and Malaysia by focusing on attracting suppliers and customers alongside establishing factories.
“The goal for India is resilience: credible, alternative capacity in assembly, test and components that global customers trust. With milestone-linked policy and a sharp focus on qualified output, India can move from assembly to advantage,” added Santosh Tiwari.
The report draws on government documents, trade data, company disclosures, working papers and independent research. Its research cutoff is 10 October 2026. Figures are based on India’s financial year, running from April to March, or the calendar year, as specified. Where evidence could not be verified, the report explicitly acknowledges the limitation.
A summary of the report is available at https://www.linkedin.com/feed/update/urn:li:activity:7516394917460414464. Readers seeking the full report can write to chairmanoffice@strat360.co.in.
Strat360 Private Limited is a research-led strategic advisory firm offering management consulting, policy research and digital solutions to companies, policymakers, investors and industry leaders. Its approach is based on the belief that strategy should anticipate emerging challenges. As artificial intelligence reshapes how work is performed and markets move faster than annual planning cycles, Strat360 positions itself as a partner helping organisations identify risks and navigate changing business conditions. Further information is available at strat360.co.in.
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