India's ESDM Market to Double to Rs 7-8 Lakh Crore by 2030, Driven by Smartphones: Report Smartphones accounted for 62 per cent of the ESDM industry in FY25, growing at a CAGR of 28 per cent during the FY20-25 period

India's Electronics System Design and Manufacturing (ESDM) industry is witnessing rapid expansion, expected to reach INR 7-8 lakh crore by 2030, expanding at a CAGR of 20-25 per cent over the next five years, according to a report CareEdge Analytics and Advisory.

The strong growth momentum is backed by robust demand for smartphones, consumer electronics, and automotive electronics, underscoring India's growing strength in the design and engineering space.

Smartphones accounted for 62 per cent of the ESDM industry in FY25, growing at a CAGR of 28 per cent during the FY20-25 period, fuelled by rising incomes, smartphone adoption, and smart device penetration. Going forward, the segment is estimated to grow at a CAGR of 23-25 per cent for the FY25-30 period.

India's electronics manufacturing ecosystem is rapidly scaling, driven by government incentives (PLI, SPECS, ECMS, NPE, Digital India), global OEM outsourcing, and a skilled workforce. This, coupled with technology-led expansion through AI, IoT, and demand for customisation, India is strengthening its position as a competitive global hub for high-value ESDM and contract manufacturing.

According to the Government, India ranks 3rd globally in economy-wide digitalisation and 12th amongst G20 nations for individual user digital adoption. With its digital economy set to grow nearly twice as fast as the overall economy, contributing almost one-fifth of national income by 2029-30, the rising adoption of digital technologies and, consequently, the demand for advanced devices and infrastructure present growth opportunities for the electronics sector.

India's smartphone ecosystem has witnessed a remarkable transformation over the past decade. From being largely import-dependent, the country has evolved into a global hub for smartphone assembly, now ranking among the top three smartphone manufacturers worldwide.

According to the Ministry of Electronics & IT, nearly 99 per cent of smartphones sold in India are currently manufactured domestically, compared to just 26 per cent in FY15, when the majority were imported. The manufacturing value of smartphones has also expanded significantly, rising from just INR 18,900 crore in FY14 to an impressive INR 4,22,000 crore in FY24, with annual shipments consistently crossing 150 million units.

Within the ESDM segment, smartphones contributed an estimated INR 2 lakh crore in FY25 and are projected to grow at a CAGR of 23-25 per cent over FY25-30. Robust domestic demand, supportive government policies, and the combined presence of global ESDM giants and strong local players have all contributed to this growth.

Furthermore, global manufacturers shifting base to India, alongside the rise of domestic ESDM players catering to demand for high-quality, cost-efficient electronics, also support this growth momentum. Additionally, rising disposable incomes, rapid urbanisation, and aspirational spending are fuelling demand for innovative and energy- efficient appliances, particularly across tier-II and rural markets, the report stated.

The Production Linked Incentive (PLI) scheme has further incentivised large-scale investments, with companies committing billions of dollars to expand their ESDM operations. The government has recently cleared the Electronics Component Manufacturing Scheme (ECMS), which aims to attract investments of INR 60,000 crore. This has led to an increase in the number of smartphone manufacturing units, from just two in 2014 to over 300 by 2024. According to ICEA, India currently produces more than 325-330 million smartphones annually, not only meeting nearly all domestic demand but also strengthening its position in the global supply chain.