SME Tracker: Electronics MSMEs to get boost from PLI, domestic demand

India’s electronics consumption grew an estimated 9-11 per cent year-on-year (Y-o-Y) to ₹15 trillion-₹16 trilion in FY25, powered by feature upgrades, affordable financing options, rising consumer aspirations and increasing industrial demand for electronic  components.  

Additionally, the push for electric vehicles and the increasing use of electronics in the automotive and power sectors aided growth. Mobile phones, consumer electronics and industrial electronics together accounted for 55 per cent-60 per cent of total sales. 

This financial year, electronics consumption is projected to grow a higher 11 per cent-13 per cent on-year, driven by government initiatives aimed at boosting demand, such as rate cuts and tax revisions. Easing inflation would also help. 

Electronics production is expected to increase 15 per cent-20 per cent Y-o-Y,with the Production Linked Incentive (PLI) scheme encouraging domestic manufacturing of mobile phones, white goods and IT hardware.  

An additional boost  is expected from the recently approved Electronics Component Manufacturing Scheme, which aims to achieve self-reliance in the electronics supply chain and foster a robust ecosystem. 

The scheme envisages to attract substantial investments of ₹59,350 crore from global and domestic players in the electronics component manufacturing space, resulting in production worth ₹4,56,500 crore and generating additional direct employment of 91,600 persons. 

These developments are promising for micro, small and medium enterprises (MSMEs) that manufacture electronic components and assemble consumer and industrial electronic products. 

 

MSME units, which account for 25 per cent-35 per cent of the electronic industry, are poised to achieve revenue growth of 14 per cent-16 per cent in FY26, driven by strong demand across mobile phones, consumer and industrial electronics, 

computer hardware, and strategic electronics. 

In terms of profitability, after remaining range-bound last fiscal, Ebitda margins of MSMEs are set to expand a modest 20-40 basis points to around 7 per cent due to an uptick in demand and continued softening in prices of key commodities.