India’s expansion in electronics has, thus far, followed an assembly-to-component strategy, using tariffs and production-linked incentives to draw investment in the manufacturing of smartphones and other network-connected devices.

The sheer scale of sales opportunity in the Indian market has also provided “in-market, for-market” justifications for investments in manufacturing in the country, according to a latest forecast by S&P Global Market Intelligence.

“India’s consumer spending on goods is worth $1.29 trillion in 2024, S&P Global Market Intelligence forecasts show, with the inflation-adjusted growth of 4.8 per cent in the past five years, expected to increase to 7.0 per cent in the next five years,” according to the report.

The acceleration in growth is particularly marked in export industries such as apparel (9.5 per cent in the next five years), household equipment including appliances and electronics (8.8 per cent in the next five years) and transport equipment (8.5 per cent in the next five years).

Apart from manufacturing for local sales, the contracted electronics manufacturers also export products, particularly smartphones, driving 44 per cent annual growth in telecom equipment exports from 2015 to 2024.

To compete with developed economies’ government support for local manufacturing and the use of rules of origin to secure their economic interests, emerging markets such as Malaysia, Indonesia and India have successfully attracted investment and boosted exports by leveraging their unique value propositions, the report noted.

India is poised to be the fastest-growing major economy over the next three years and the third largest globally by 2030. Its 2024 entry into JP Morgan’s Government Emerging Market Bond Index could provide additional government funding and unlock significant resources in domestic capital markets.

“This is only a first step — investors will continue looking for improved market access and settlement procedures,” the report mentioned.