Supply chain resilience and dual-sourcing playbooks for EMS & ODM

India’s electronics manufacturing industry is witnessing explosive growth and is projected to scale from US$ 217B today to US$ 710B by 2030, growing at a 22% CAGR. India is quickly emerging as a global hub for Electronics Manufacturing Services (EMS) and Original Design Manufacturing (ODM) driven by strong demand for smartphones, wearables, EVs and digital infrastructure, along with government support through Production Linked Incentive (PLI).

However, this success story carries a critical caveat as over 40% of the industry’s market opportunity depends on imports of essential components such as semiconductors, Printed Circuit Boards (PCBs), display panels and lithium-ion cells. This reliance on imports makes the supply chain highly vulnerable to global disruptions, making resilience not just a best practice but a business necessity.

Requirement of supply chain resilience

The electronics industry, especially EMS and ODM players, has faced several disruptions in recent years, starting with US-China trade tensions, followed by the COVID-19 pandemic and ongoing global component shortages. These shocks exposed a key vulnerability like over-dependence on China for critical inputs, creating both operational and geopolitical risks.

In response, global supply chains are diversifying, and India has emerged as a viable alternative with large-scale capacity, cost advantages, and policy support like the PLI schemes and a US$ 9B Semicon India programme to boost domestic semiconductor manufacturing. However, progress has been uneven. India has built strength in downstream activities such as assembly and module integration but remains import-reliant for upstream components like ICs, display panels, and silicon parts.

Today, over 45% of India’s electronics imports come from China, and nearly 90% of high-tech components in upstream segments are sourced from Chinese suppliers. While India can assemble complete units, true self-reliance will require deep investments in upstream manufacturing capabilities.

Analysis of electronics value chain and China dominance in overall imports

India remains highly import-dependent across the electronics manufacturing value chain, relying heavily on imports of raw materials, active components, and advanced PCBs. The dependency varies by segment, depending on India’s local capabilities in technology, scale, and cost competitiveness. (Exhibit 1)

Exhibit 1: Weak domestic capabilities across electronics value chain

India remains heavily reliant on imports for upstream high-tech components such as semiconductors and display panels due to the lack of domestic fabrication facilities and a supply ecosystem. In contrast, China dominates this segment, accounting for ~33% of global electronics exports in 2023 and hosting major players like Semiconductor Manufacturing International Corporation (SMIC) and Beijing Oriental Electronics (BOE). This concentration has created strategic risks for India, including cost pressures, supply delays, and geopolitical exposure.

Moving downstream in the value chain, the dependency for passive components like resistors and capacitors, dependency is moderate. Although India has some domestic production by firms such as Vishay Intertechnology, a large share of demand is still met through imports from China and Southeast Asia.

At the final assembly stage, however, India has made significant progress. The country has emerged as a preferred global hub for electronics assembly, driven by low labor costs, a skilled workforce, and strong government support, including over US$ 17B allocated under the PLI scheme across electronics and semiconductor sectors. Companies like Foxconn, Pegatron, and Dixon Technologies have scaled up operations, with over 99% of smartphones sold in India now assembled locally. This has enabled India to expand its footprint in final product manufacturing across smartphones, consumer electronics, and IT hardware.

Global benchmarks: lessons for India’s manufacturers

India must move from reactive sourcing to proactive resilience planning, turning risk management into a competitive edge. Leading global EMS and ODM companies have already taken proactive steps to strengthen their supply chains and reduce risks:

• Foxconn is shifting over 20% of production to India & Vietnam, reducing China reliance
• Jabil has signed multi-sourcing contracts for passive components and MCUs
• A Taiwanese ODM deployed AI-driven visibility platforms, reducing unplanned downtime by 40%