India’s EMS industry: growth outlook and valuation implications

India’s electronics manufacturing services (EMS) industry is projected to grow at 25–30% CAGR over FY24–29E, positioning the country as a significant global electronics manufacturing hub. This note summarises the principal growth drivers and their implications for valuation work.

China+1 diversification: Global supply chains continue to diversify, and India is among the primary beneficiaries of this reallocation.

Export growth: Electronics exports are projected to reach approximately USD 48 billion by FY26, an increase of about 25% year on year.

Policy support: Production-Linked Incentive (PLI) schemes, the ₹400 billion Electronics Components Manufacturing Scheme (ECMS) and semiconductor initiatives support this growth.

India currently holds an estimated 4–5% of the global EMS market, which indicates considerable headroom for growth as component localisation and export-led manufacturing increase.

Implications for valuation

Integrated business models: Companies backward-integrating into component manufacturing are moving from assembly toward end-to-end value creation, changing the shape of their earnings and capital intensity.

Valuation complexity: Assessing these evolving businesses requires analysis beyond traditional metrics, including how the synergies between component manufacturing and EMS operations are reflected in forecasts and multiples.

The industry appears to be undergoing a structural shift rather than a cyclical trend, and valuation frameworks for integrated EMS players need to reflect that transition.