India’s electronics debate is trapped between two slogans. The government points to expanding production and exports and says “Make in India” is working. Critics open a phone, identify imported components and say nothing is truly made here. Both statements contain enough truth to sustain an argument and not enough to guide the next decade. I believe the only serious position is to recognise assembly as an achievement and insist that policy now go much deeper.
Assembly is real manufacturing. It employs people, creates process discipline, builds logistics and gives suppliers a reason to locate nearby. The policy direction is visible in MeitY’s electronics programmes and the Invest India electronics overview. I do not believe India should belittle factories because they do not yet produce every component. But we should also stop treating a final assembly line as proof that the hard dependence problem has been solved.
Chinese smartphone brands still dominate much of the Indian market because they spent years mastering more than low prices. They built distribution, retailer incentives, fast product cycles, localised software, repair networks and a ruthless understanding of what buyers notice in a shop. Indian policy can attract a plant. It cannot decree that consumers forget those capabilities.
Assembly was the necessary first chapter
Supply chains do not appear fully formed. A global manufacturer first needs confidence that India can deliver volume and quality. Final assembly creates demand for packaging, chargers, enclosures, cables and progressively more complex parts. Workers and managers learn production systems. Ports and customs encounter the industry’s rhythms. This accumulated competence is valuable even when imported components remain substantial.
The production-linked incentive model helped overcome the chicken-and-egg problem: suppliers hesitate without volume, while assemblers hesitate without suppliers. Guaranteed scale can start the loop. The criticism that incentives benefit large corporations is not frivolous, however. Public money should buy additional capability, not reward output that would have occurred anyway. That means government must publish clear performance data and steadily raise localisation requirements.
Local value addition is difficult to measure. A component assembled in India may contain imported subcomponents; transfer pricing can obscure where value sits; a high-cost imported chip can dominate the bill even when many physical parts are local. Policymakers need sophisticated auditing, not ceremonial percentages. The aim should be economically meaningful capability—engineering, materials, tooling and intellectual property—not creative relabelling.
Why Chinese brands remain formidable
Chinese companies identified the Indian consumer’s priorities with embarrassing speed. Large batteries, fast charging, vivid displays and camera-heavy marketing arrived at price points that domestic brands struggled to match. The products were not always elegant, software could be cluttered and update support was uneven. Yet the overall proposition was legible: more visible hardware for the money.
They also understood retail. In many towns, a buyer’s “choice” is shaped by which brands have stock, displays, financing and a salesperson confident of earning an incentive. Chinese brands invested in that last metre. Indian challengers sometimes speak as though national sentiment will overcome weaker availability or uncertain repairs. It will not. A shopkeeper who expects fewer returns and quicker service will recommend accordingly.
Scale brings advantages in component procurement and product development. A brand selling across several markets can reuse platforms, negotiate lower prices and launch frequently. Indian brands often depend on similar external design and manufacturing ecosystems without matching the volume. Policy must therefore help them develop distinctive capability rather than merely subsidise a smaller imitation.
There is also a trust issue. Several Indian brands disappointed buyers during earlier smartphone cycles through inconsistent quality and abandoned software. Consumers remember. The label “Indian” may earn attention, but the second purchase must be earned through support. Rebuilding trust requires boring consistency over years.
The next incentives must favour depth
I would prioritise component clusters around displays, camera modules, batteries, power electronics, mechanical parts, packaging and semiconductor assembly and testing. Not every component should be produced domestically at any cost. India must identify areas where market size, engineering talent and adjacent industries create realistic advantage. Autarky is not a supply-chain strategy.
Tooling deserves particular attention. Moulds, precision fixtures, testing equipment and production software are less glamorous than a fabrication plant but crucial to iteration speed. When every change requires imported tools and foreign engineering support, a factory remains dependent even if its workforce is local. Grants for supplier upgrading, shared testing facilities and technical apprenticeships may deliver more durable value than another launch ceremony.
Research incentives should reward teams located in India that own meaningful product decisions. “Designed in India” must mean more than adapting wallpaper and packaging. Hardware architecture, radio tuning, camera science, thermal design and long-term software maintenance are capabilities. Indian engineers already perform much of this work for global companies. The challenge is connecting their expertise to products and intellectual property anchored here.
Trade policy needs a screwdriver, not a hammer
High duties can encourage localisation, but poorly sequenced tariffs raise consumer prices and make exports uncompetitive. If an essential component has no adequate Indian supplier, taxing it heavily does not create one overnight. It simply increases the finished product’s cost. Duties should be predictable, time-bound and coordinated with credible domestic capacity.
India also needs access to global inputs. The goal is resilience, not isolation. A diversified supply chain can include trusted imports while building local strength in selected layers. Trade agreements, customs efficiency and standards recognition matter as much as subsidies. A component delayed at a port can stop an entire production line.
Chinese investment presents a harder question. Security concerns are legitimate, particularly in connected devices and critical infrastructure. Yet blanket hostility can also deprive Indian manufacturing of capital and supplier expertise. India needs case-by-case scrutiny, data safeguards and joint-venture rules that encourage technology and workforce development. Policy should be firm without becoming performatively unpredictable.
Measure what remains when incentives end
The success test is not how many phones carry an Indian assembly label this quarter. It is what survives after incentives decline: trained workers, competitive suppliers, export customers, engineering teams, patents, repair networks and brands people willingly buy. If factories leave when subsidies end because every important input still arrives from elsewhere, the policy purchased activity rather than capability.
The government deserves credit for recognising that manufacturing scale required intervention. Critics who describe all progress as fake are arguing against visible factories and exports. But the government must now tolerate more demanding evaluation. The next phase will be slower and less photogenic. Component yields, supplier quality and engineering retention do not make stirring campaign videos.
India has moved from asking whether major electronics manufacturing can happen here to asking how much value it can retain. That is progress. Chinese brands remain strong because they built ecosystems, not because Indian consumers lack patriotism. The right response is to build a better ecosystem—patiently, competitively and with less interest in what can be printed on the box.
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