India’s electronics manufacturing sector has emerged as one of the most significant outcomes of the government’s Production-Linked Incentive (PLI) scheme. Over the past five years, the industry has reported the creation of more than 1.33 million jobs, alongside a sharp rise in mobile phone manufacturing and exports.
For businesses, employers, and investors, this development matters not only as an industrial policy success but also for its implications on labour, compliance, supply chains, and long-term manufacturing strategy in India.
Key Developments and Facts
- Job creation: The electronics industry has generated over 1.33 million jobs since the introduction of the PLI scheme. Of this, around 400,000 are direct manufacturing jobs, while approximately 930,000 are indirect roles across logistics, ancillaries, and services.
- Workforce composition: Industry estimates indicate that nearly 70 percent of new jobs have gone to women and first-time workers, reflecting a shift towards more formal and inclusive employment.
- Manufacturing growth: Mobile phone production has increased from about ₹2.2 lakh crore in FY21 to over ₹5.45 lakh crore in FY25.
- Export expansion: Exports of mobile phones have risen nearly tenfold, crossing ₹2 lakh crore over the same period.
- Wage outgo: In FY25 alone, the mobile manufacturing ecosystem paid an estimated ₹25,000 crore in wages to blue-collar workers. Average monthly wages are reported at around ₹18,000 for direct employees and ₹14,000 for indirect staff.
The Apple-led manufacturing ecosystem, including contract manufacturers such as Foxconn, Pegatron, and Tata Electronics, has been a key driver of this expansion. More than 20 percent of iPhones are now manufactured in India.
Why This Change Occurred
The PLI scheme, launched in April 2020, was designed to incentivise large-scale manufacturing, deepen domestic value addition, and reduce import dependence. For global manufacturers, it provided cost-linked incentives and policy visibility. For India, it enabled the replication of large, integrated manufacturing models with structured skilling, formal employment, and export orientation.
Policy stability, combined with scale commitments from global players, has accelerated capacity creation and workforce hiring in a relatively short period.
Implications for Clients
Businesses and Manufacturers
Companies operating in or entering the electronics value chain should expect increased scrutiny on labour compliance, wage structures, and documentation, given the scale of formal employment. PLI-linked entities must also ensure strict adherence to incentive conditions, local value addition norms, and audit requirements.
Employers and HR Functions
The rapid growth in blue-collar employment, particularly of women, brings obligations under labour laws relating to workplace safety, housing, transport, and social security registrations. Employers should review compliance with applicable labour codes, provident fund, ESI, and state-specific regulations.
Investors and Promoters
The sector’s growth trajectory strengthens India’s position as a global manufacturing base. However, returns remain closely linked to policy continuity, export competitiveness, and supply-chain localisation. Investment decisions should factor in potential changes to incentive structures over time.
NRIs and HNIs
For those evaluating India-focused manufacturing or private equity opportunities, electronics manufacturing presents scale and export visibility. At the same time, FEMA regulations, structuring, and tax implications need careful assessment.
What to Watch and Next Steps
- Policy continuity: The PLI scheme’s long-term effectiveness depends on continued policy support and timely disbursement of incentives.
- Compliance and audits: Companies should maintain robust documentation to support incentive claims and labour compliance.
- Value addition norms: Future phases may place greater emphasis on domestic component manufacturing, impacting supply-chain strategies.
- Regulatory clarity: Any modifications to labour codes, export incentives, or sector-specific regulations should be monitored closely.
While industry bodies project further scaling and job creation, outcomes will remain contingent on execution, global demand, and regulatory stability. Businesses and investors should align expansion and compliance strategies accordingly.