For years, the cleverest criticism of Indian electronics policy was a screwdriver joke. Companies imported nearly everything, tightened a few screws locally, placed “Made in India” on the box and collected applause. The joke contained truth. Final assembly creates less value and strategic capability than components, tooling or design. But a criticism can become lazy when it refuses to notice movement. India’s electronics manufacturing base has expanded materially, and mobile phones have become a significant production and export story. The argument should now be about depth, not whether anything happened.
The government’s July 2026 official account of electronics manufacturing reports large increases in production and exports over the past decade and describes a progression from finished products toward sub-assemblies, components and machinery. Government releases naturally present the brightest version of policy performance; I read them as claims to test, not scripture. Still, the visible growth in factory activity and exports cannot be dismissed as public relations. Production-linked incentives changed corporate calculations.
Assembly is a stage, not a sin
Every manufacturing ecosystem begins somewhere. Final assembly develops logistics, quality control, labour discipline and relationships with global buyers. Volume gives suppliers a reason to locate nearby. Engineers and managers learn production systems. None of that guarantees deeper capability, but skipping assembly because it is insufficient would be like refusing primary school because it is not a doctorate. The policy question is whether firms progress or settle permanently at the easiest subsidised stage.
The original large-scale electronics incentive scheme offered rewards linked to incremental sales. MeitY’s annual report description of the programme records incentives for mobile phones and specified components. This design had a rational purpose: attract scale quickly in a globally concentrated supply chain. It also carries risks. Sales-linked incentives can reward output without ensuring enough domestic intellectual property, local supplier development or durable competitiveness after subsidies end.
I am nevertheless impatient with commentators who use “assembly” as an incantation to make thousands of jobs and billions in exports disappear. Factory employment matters, particularly where women gain formal work in high-precision lines. Export capability matters because it subjects plants to demanding quality and delivery standards. Foreign firms do not ship globally from India as a patriotic favour. They do so when policy, labour, infrastructure and cost form a credible package.
Chinese brands reveal both success and dependence
Chinese smartphone brands still dominate large parts of India’s consumer market because they understand distribution, pricing and rapid product cycles. Their endurance is sometimes presented as proof that Make in India failed. That confuses brand nationality with production geography. A Chinese-owned brand can manufacture locally, employ Indian workers and source some Indian inputs while profits and core technology remain foreign. These are separate dimensions and should be measured separately.
The government should resist crude nationalism that treats consumer choice as disloyalty. Buyers select Xiaomi, Vivo, Oppo or Realme because the products often offer competitive displays, batteries, cameras and retail availability at prices Indian brands have struggled to match. Scolding customers will not create a domestic champion. Building component capability, design talent, patient capital and reliable quality might. A logo on the back is less important than where value, engineering knowledge and supplier power accumulate.
India also remains dependent on imported semiconductors, displays, camera modules, memory and manufacturing equipment. No country economically produces every input. Even China’s electronics industry relies on complex cross-border networks. The objective should not be autarky but strategic depth: identify components where Indian scale can become competitive, reduce dangerous single-source dependencies and build firms capable of exporting without permanent protection.
The component incentive programmes therefore matter more than another triumphant announcement about handset volumes. Connectors, enclosures, batteries, printed circuit assemblies, camera subassemblies and precision tooling create layers of suppliers. These businesses need stable power, efficient customs, testing laboratories and technicians. A glamorous semiconductor fabrication announcement cannot substitute for the unglamorous industrial commons on which factories depend.
Policy must reward learning, not only production
I would tie future incentives more explicitly to verified value addition, workforce training, local research spending and supplier development. Metrics must be designed carefully because firms can game crude localisation ratios. Independent audits and public reporting are essential. The government should disclose not only investment and production totals but incentive disbursements, missed milestones and the domestic value generated per rupee of support.
There is a legitimate counterargument that excessive conditions will make India less attractive than Vietnam or other manufacturing alternatives. Global supply chains move quickly, and predictable simplicity is a competitive advantage. I do not want ministries micromanaging component choices. The solution is a small number of clear, stable targets rather than discretionary approvals. Firms can choose how to meet them; taxpayers can see what they purchased.
Skills require more attention than headline job counts. Assembly work can be repetitive and vulnerable to automation. Workers need routes into maintenance, process engineering, quality assurance and supervision. Industry partnerships with technical institutes should lead to recognised credentials portable between employers. Women workers need safe transport, fair promotion and facilities that allow careers to continue beyond an initial few years. A factory ecosystem is successful when it builds human capability, not merely payroll entries.
Indian brands face a different problem. Government procurement and incentives can help them reach scale, but protection from competition will make them complacent. Consumers remember unreliable hardware and abandoned software. A credible Indian phone company must offer design, service and updates equal to multinational rivals. Nationality can earn curiosity; it cannot sustain loyalty. The state should support capabilities horizontally rather than select a decorative champion.
Design is the next frontier
Manufacturing captures only part of electronics value. Product architecture, chip design, software integration, patents and branding command larger margins. India already has substantial engineering talent working for global firms, including in semiconductor design. The challenge is connecting that talent to domestic product companies and manufacturing networks. Tax incentives alone cannot create this bridge. Universities, venture capital, procurement and intellectual-property rules all shape it.
Public procurement can provide early demand for Indian-designed equipment, but specifications should reward performance and security rather than become a closed shop. The worst outcome would be expensive, mediocre products protected by patriotic language. The best would be government as a demanding first customer that helps firms validate products before competing internationally. Transparency in tenders matters because industrial policy loses legitimacy when it appears tailored to incumbents.
Environmental costs also belong in the calculation. Electronics manufacturing uses water, chemicals and energy, while rapid replacement produces waste. India should build recycling and material-recovery capacity alongside production. Extended producer responsibility must be enforced, and repairability can support local employment. Becoming a manufacturing hub while importing inputs and accumulating discarded devices would be an incomplete victory.
The record so far justifies cautious confidence. The government was right to see electronics as a strategic industry and to use incentives to overcome initial disadvantages. Production and exports have grown; global firms now treat India as more than a sales market. Critics who repeat the screwdriver line unchanged are analysing an old photograph. Yet ministers should not become intoxicated by gross output figures. The hard work begins when easy assembly gains are exhausted.
My test for the next five years is straightforward. Are more components made competitively in India? Are local suppliers exporting independently? Are workers moving into higher-skill roles? Are Indian firms designing products consumers voluntarily choose? Are incentives declining as competitiveness rises? If the answers improve, Make in India will have become an industrial strategy rather than a label. If not, the screwdriver joke will return—and this time the government will have had enough scale and time that it cannot complain about the punchline.
