Designed in India or Assembled in India? Decoding the Truth Behind India's Electronics Revolution
Walk into any electronics store in India today and you'll notice a common pattern. Smartphones, smart televisions, laptops, wireless earphones, smartwatches and household appliances proudly carry labels that read "Made in India."
Siddhi Jain
7/6/20266 min read
Walk into any electronics store in India today and you'll notice a common pattern. Smartphones, smart televisions, laptops, wireless earphones, smartwatches and household appliances proudly carry labels that read "Made in India." Government campaigns celebrate India's emergence as a global manufacturing hub, companies announce new factories almost every month, and production figures continue to break records. In FY24, India's electronics production crossed ₹9 lakh crore, while electronics exports exceeded US$29 billion, making the sector one of the fastest-growing segments of Indian manufacturing. Smartphones alone now account for a significant share of these exports, with global brands increasingly producing devices within the country.
These achievements are real and deserve recognition. Over the last decade, India has transformed itself from being primarily an importer of finished electronics into one of the world's largest smartphone manufacturing destinations. Companies such as Apple, Samsung, Xiaomi, Vivo and Oppo now assemble millions of devices in Indian factories every year. The government's Production Linked Incentive (PLI) Scheme has attracted billions of dollars in investments, creating employment and encouraging multinational corporations to diversify manufacturing beyond China.
However, behind these impressive numbers lies a question that receives far less attention.
When a smartphone is labelled "Made in India", how much of it is actually Indian?
The answer is more complicated than most consumers realize.
To understand this, one must first understand how modern electronics are manufactured. Contrary to popular belief, no single country manufactures an entire smartphone. Instead, production is spread across an intricate global supply chain involving dozens of countries, each specializing in specific components. A typical smartphone contains a processor, memory chips, display panel, camera sensors, batteries, printed circuit boards, speakers, microphones, connectors, antennas, charging modules and hundreds of smaller electronic components. These parts rarely originate from the same country.
The processor powering a flagship smartphone is often designed by American companies such as Qualcomm or Apple and fabricated by Taiwan Semiconductor Manufacturing Company (TSMC) in Taiwan. Memory chips may come from Samsung in South Korea or SK Hynix. Display panels are commonly manufactured by Samsung Display, LG Display or Chinese firms such as BOE. Camera sensors are frequently supplied by Sony of Japan, while battery cells, connectors and several electronic modules are sourced from factories across China, Vietnam, Japan and South Korea.
By the time these components reach an assembly plant in India, the majority of the product's technological complexity has already been created elsewhere.
This is where the distinction between manufacturing and assembly becomes crucial.
Assembly involves integrating imported components into a finished product through testing, software installation, packaging and quality control. Manufacturing, on the other hand, involves producing the high-value components themselves—semiconductors, display panels, batteries, sensors, integrated circuits and advanced electronic modules. While assembly undoubtedly creates employment and contributes to industrial growth, the largest share of value addition in electronics generally lies in component manufacturing, intellectual property, chip design and advanced engineering rather than the final assembly process.
Consider a simplified example. Imagine a smartphone costing ₹50,000. The processor, display, camera sensors, memory chips and battery together may account for a substantial portion of the device's production cost. If these components are imported and only assembled domestically, the economic value retained within India is far lower than the product's final selling price might suggest. Although precise figures vary across models and manufacturers, industry estimates indicate that domestic value addition in smartphones has improved considerably in recent years but still remains well below the total product value, especially in premium devices.
This does not mean the "Made in India" label is misleading.
It simply means that many consumers misunderstand what the label represents.
Under prevailing regulations, a product may legitimately qualify as being manufactured in India if substantial transformation occurs within the country. Assembly, testing, software installation, quality assurance and packaging all contribute to that transformation. Therefore, when companies market these products as made in India, they are generally complying with existing legal definitions rather than making false claims.
Yet the economic implications remain important.
Countries derive significantly greater long-term benefits when they manufacture critical components rather than merely assembling imported ones. Component manufacturing generates higher technological capabilities, encourages research and development, creates skilled engineering jobs and strengthens domestic supply chains. It also reduces dependence on imports during geopolitical disruptions or global supply chain shocks, as witnessed during the COVID-19 pandemic.
China offers an excellent illustration of this evolution.
When global electronics manufacturing first shifted to China during the 1990s and early 2000s, much of the work involved assembly for multinational corporations. Over time, however, China invested heavily in semiconductor fabrication, battery manufacturing, display technologies, precision engineering, industrial robotics and component ecosystems. Today, Chinese companies are not merely assembling products—they are producing many of the world's most critical electronic components while also designing globally competitive consumer brands.
India currently stands at a similar crossroads.
The country has achieved remarkable success in attracting final assembly operations, particularly in smartphones. According to industry estimates, India now manufactures hundreds of millions of smartphones annually and has become one of the largest mobile phone producers in the world by volume. Apple's expanding manufacturing footprint through partners such as Foxconn, Tata Electronics and Pegatron demonstrates growing international confidence in India's production capabilities. These developments have generated employment, boosted exports and reduced imports of finished devices.
Nevertheless, the next stage of industrial development cannot rely solely on assembly.
A sustainable electronics ecosystem requires domestic production of semiconductors, display panels, camera modules, printed circuit boards, lithium-ion battery cells, electronic chemicals and advanced manufacturing equipment. Each of these industries demands substantial capital investment, highly skilled talent, reliable infrastructure and years of technological development. Building a semiconductor fabrication plant alone can require investments exceeding US$10 billion, along with uninterrupted electricity, ultra-pure water systems and extraordinarily precise manufacturing standards.
This explains why countries such as Taiwan, South Korea and Japan spent decades building their technological leadership.
It also explains why expecting India to replicate these ecosystems within a few years would be unrealistic.
Recognizing this challenge, the Government of India has introduced multiple initiatives beyond smartphone assembly. The Production Linked Incentive Scheme has expanded to include components, IT hardware and semiconductor manufacturing. Incentives have also been announced for semiconductor fabrication, display manufacturing and electronics component ecosystems. Domestic firms such as Tata Electronics are making significant investments in semiconductor packaging and electronics manufacturing, while several global companies are establishing new production facilities within the country.
However, policy incentives alone cannot transform an industry.
Electronics manufacturing depends upon an interconnected ecosystem where suppliers, component manufacturers, logistics providers, testing facilities, research institutions and skilled labour evolve together. A single smartphone factory cannot thrive in isolation if every critical component continues to be imported. Competitive manufacturing ecosystems emerge when hundreds of supporting industries develop simultaneously.
Another overlooked aspect is intellectual property.
The highest profits in electronics often accrue not to the companies assembling devices but to those designing processors, developing operating systems, creating software platforms and owning globally recognized brands. Apple captures a significant share of the value generated by an iPhone not because it manufactures every component itself, but because it owns the product design, software ecosystem, patents and customer relationship. Similarly, companies such as Qualcomm earn substantial revenues by licensing chip technologies rather than assembling smartphones.
For India to become a true electronics superpower, success must eventually extend beyond factories. It must include globally competitive product design, semiconductor innovation, electronics research, embedded software development and internationally recognized technology brands. Manufacturing remains an essential foundation, but long-term leadership requires innovation alongside production.
For consumers, the debate should not revolve around whether products labelled "Made in India" are genuine. Most of them are. The more relevant question is understanding what exactly is being made in India and how much economic value remains within the country. Assembly represents an important first step in industrialization, creating jobs, attracting investment and integrating India into global supply chains. Yet it is only one stage in a much longer journey.
India's electronics revolution is therefore neither a myth nor a finished success story. It is a work in progress.
The country has moved beyond simply importing finished products and has established itself as a major assembly hub for global electronics. The challenge now is to climb higher within the value chain by manufacturing sophisticated components, strengthening domestic supplier networks, investing in advanced technologies and creating products that are not merely assembled in India but also conceived, engineered and designed here.
The label on the back of a smartphone may proudly declare "Made in India." The next decade will determine whether that label comes to represent assembly alone, or an entire ecosystem of innovation, engineering and manufacturing excellence.