GLOBAL PRESENCE: A STRATEGIC NECESSITY FOR INDIAN EMS FIRMS

India’s Electronics Manufacturing Services (EMS) industry is entering a decisive structural phase. What began as a cost-arbitrage-led, build-to-print sector is steadily transforming into an engineering-driven, globally integrated ecosystem. The inflection point is visible not only in corporate boardrooms but also in national policy frameworks.

According to data published by the Ministry of Electronics and Information Technology (MeitY), India’s electronics production has crossed the US$ 100 billion mark in recent years, with exports witnessing consistent growth, particularly in mobile phones and telecom equipment. The government has articulated an ambitious target of US$ 300 billion in electronics manufacturing by 2026. Complementing this, India Cellular and Electronics Association (ICEA) projects that India could achieve US$ 120 billion in electronics exports by the middle of the decade if ecosystem capabilities deepen and value addition increases.

The above numbers are significant. But scale alone does not define global leadership. The global EMS market is estimated at over US$ 600 billion. India’s share, while expanding, remains modest compared to established manufacturing hubs such as China, Taiwan, and parts of Southeast Asia. The next phase of growth will not be driven purely by labor cost advantage or domestic consumption. It will be determined by how effectively Indian EMS firms integrate into global value chains.

Structural Shifts Reshaping Global Electronics

Three structural forces are reshaping the global electronics landscape. First, supply chain diversification has become a strategic imperative under “China-Plus-One” and geopolitical risk mitigation strategies. Second, product complexity is rising rapidly as electronics power electric mobility, renewable energy systems, aerospace platforms, and AI-enabled industrial automation. Third, regulatory intensity is increasing across sectors, particularly in Medical Devices, Automotive

Electronics, and Defence Systems. These forces are redefining what OEMs expect from EMS partners.

From Assembly Partner to Lifecycle Collaborator

The earlier model positioned Indian manufacturers primarily as efficient assembly hubs. Today, global OEMs are looking for multi-node partners capable of supporting the entire product lifecycle—from design validation to high-volume production—across geographies. Physical presence near innovation centers enables early-stage engineering collaboration, while Indian facilities provide scalable and cost-efficient manufacturing. This integration is strategic, not symbolic.

Why Proximity to OEM Innovation Matters

During the New Product Introduction phase, manufacturing inputs significantly influence cost, compliance timelines, and reliability metrics. In sectors such as Aerospace, Medical Electronics, and EV Power Systems, iterative design feedback can determine commercial viability. Proximity to OEM R&D teams reduces iteration cycles and accelerates certification pathways. Once designs stabilize, production can transition or expand within India’s manufacturing corridors supported by PLI schemes.

Moving Up the Value Chain

PLI schemes are designed to move the country up the value chain. Policy discussions have consistently emphasized value addition, technology absorption, and export competitiveness rather than mere assembly volumes. However, policy support alone cannot secure global relevance. Capability integration must follow.

Engineering Depth as India’s Core Advantage

India’s intrinsic strength lies in engineering depth. The country produces a substantial pool of electronics and software engineers annually, and has developed strong capabilities in embedded systems, firmware development, industrial electronics design, and validation services. This positions India uniquely among emerging manufacturing hubs.

A global footprint amplifies this advantage. Exposure to international compliance regimes—UL, CE, FDA, AS9100, and automotive functional safety standards—builds institutional knowledge. When harmonized through standardized quality management systems and unified ERP platforms, these learnings elevate domestic manufacturing benchmarks. In effect, overseas presence becomes a channel for capability absorption and redistribution.

Supply Chain Resilience as a Strategic Differentiator

The pandemic and subsequent geopolitical tensions exposed vulnerabilities in concentrated sourcing models. Lead times expanded unpredictably, logistics costs spiked, and semiconductor shortages disrupted production worldwide. As a result, supply chain resilience has moved from operational consideration to board-level strategy.

For Indian EMS firms, operating across geographies enables diversified sourcing corridors, tariff optimization, and production load balancing. Multi-node manufacturing networks provide continuity when regional disruptions arise. This resilience is increasingly a qualification criterion for Tier-1 OEM engagements.

Global Expansion and ‘Make in India’ Imperative

Importantly, international expansion does not dilute the ‘Make in India’ vision. On the contrary, it strengthens it. Overseas engineering centers and customer-facing facilities act as conduits for technology transfer, advanced compliance exposure, and process benchmarking. The knowledge and systems built abroad flow back into domestic operations, enhancing ecosystem sophistication.

Several Indian EMS firms have already begun operationalizing this model by building engineering interfaces in customer markets such as the United States, while anchoring scalable production
in India.

From Cost Arbitrage to Capability Arbitrage

The strategic crossroads for Indian EMS firms is therefore clear. Remaining purely domestic manufacturers may limit long-term value creation for firms. As OEM expectations evolve toward lifecycle collaboration, compliance depth, and supply chain resilience, partners must reflect these priorities.

The structural transformation underway signals the coming of age of Indian EMS. The narrative is shifting from cost arbitrage to capability arbitrage. It reflects broader industrial ambition—an India that seeks not only to manufacture at scale, but to influence global product ecosystems.

Glocal Future of Indian EMS

To capture a larger share of the global EMS opportunity, Indian firms must think beyond factory expansion. They must integrate engineering, digital transparency, policy alignment, and international presence into a coherent growth strategy.

The future of Indian EMS lies in being ‘Glocal’, anchored in India’s manufacturing strength while embedded within global innovation and supply networks. In this new paradigm, global footprint is not an optional expansion strategy. It is the foundation of sustainable competitiveness.
 

NIRMAL VASANI Chief Operating Officer Aimtron Group

Source: Magic Wand Media