FDI In Electronic Systems Sectors

The fast-growing electronics market in India is backed by rapid urbanization and increased incomes. Digitalization has led to increased demand for high-end technology devices, escalating the consumption of electronic devices. Furthermore, technology transitions such as the rollout of 4G/ LTE networks and IoT are driving accelerated adoption of electronics products. Initiatives such as ‘Digital India’ and ‘Smart City’ projects have raised the demand for IoT in the market. Similarly, the digital banking sector like wallet players and payment banks will raise demand for POS and VSAT-enabled mobile ATMs, which will further give a fillip to the growing industry.

The electronics manufacturing sector has tremendous growth potential which is still yet to be explored. FDI in electronics in India will result in better technology, increase cash flow and other resources that will help discover this potential to the fullest.

100% FDI in electronic systems sector is allowed under the automatic route.

In case of electronics items for defence, FDI equity inflows in electronics sector up to 49% is allowed under automatic route and beyond 49% through the government approval.



  • 1

    The gaming market in India is expected to reach $801 mn by 2022

  • 2

    Indian IoT market to reach $9 bn by 2020

  • 3

    Fastest growing smartphone market in Asia Pacific

Electronics market in India is projected to reach US $ 228 bn by 2020 from over $ 100 bn in 2016-17

Nearly 70-80% of the electronic components market is imports driven. The electronics products segment contributed 82% to the overall market in 2015, and the rest comprised electronic components

The Electronic Products industry in India was valued at $61.8 bn in 2015

The Electronic component industry was valued at $ 13.5 bn in 2015; of which Electro-mechanical segment had the highest share at 30%. Passive and active segments handled 27% and 22% share, respectively, while remaining market of 20% was handled by the Others segment

  • Digital media

    Digital wallets, Wi-Fi connectivity: IoT, routers,
  • Smart cities

    Goal to build 100 smart cities by 2020
  • Government cloud initiative

    “Meghraj” – cloud adoption for e-governance
  • National Knowledge Network (NKN)

    The government aims to connect educational institu
  • Ultra mega solar project

    Solar power driven pump sets & water pumping stati
  1. Jan 2019: TEGNA Electronics in partnership with Chinese handset maker Oppo and other companies is setting up a Greenfield Electronics Manufacturing Cluster in Uttar Pradesh to manufacture electronics and support accessories.
  2. Dec 2018: IESA and Government of Karnataka launch India’s First Semiconductor Fabless Accelerator Lab.
  3. Mar 2018: Tata Communications will invest $97.5 mn in developing IoT business.
  4. Mar 2018: Kyocera CTC Precision Tools Private Limited (KCPT) will invest $37.51 mn – $40.0 mn to increase production by 3 times within next 3 years.
  5. Mar 2018: Micromax will invest $30.0 mn to further diversify into consumer electronics segment.

  • $2.4 bn FDI inflows in Electronics during April 2000 – March 2019
  • 79% FDI in electronic manufacturing equity inflows growth in 2014-16 viz-a-viz 2012-14
  • 100% FDI allowed in the Electronics sector

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