Recent export growth in electronics signals a structural shift in India's export basket. Critically evaluate the role of industrial policy in this transition.

Electronic goods grew 70.44%, the fastest of any commodity named in the September 2026 trade release. Over April–September 2026-27, merchandise exports rose about 18.5% [1]. Industrial policy has driven this shift. However, the gains so far come from assembly, and India still captures little of the value in the product.

Electronics as a structural shift

• India's export basket has long leaned on petroleum products and gems & jewellery. Electronics, led by mobile phones, is now one of India's leading export items [2].
• India is moving into global value chains and away from exporting low-tech and resource-based goods.

Role of industrial policy: achievements

• Production Linked Incentive (PLI): these output-linked payments brought in large-scale phone assembly and helped offset India's cost disadvantage [2].
• Foreign Trade Policy 2023 focuses on export promotion and ease of doing business. It sets a US$ 2 trillion exports target by 2030 [3].
• Trade agreements with the UAE, UK and Australia widened market access. PIB credits them for record FY26 exports of US$ 863.1 bn [4].

Role of industrial policy: limitations

• Narrow base: mobile phones alone make up 52.5% of electronics exports [2].
• Import dependence: integrated circuits (chips) are the largest electronics import, at 23.7%. In 2024 India ran an electronics trade deficit of US$ 58.5 bn [2].
• Low value addition: India has only about 1% of world electronics exports. World demand is moving towards components, but India's gains are in a few finished products [2].
• Macro spillover: in H1 FY27, imports excluding petroleum and gems & jewellery rose by about US$ 48 bn. The matching exports rose by only about US$ 28 bn [1]. Imported inputs for assembly likely explain part of this gap.

Evaluation Industrial policy has been necessary but not sufficient. It built scale in assembly but not depth in components. Each export dollar therefore keeps limited value in India.

Policy push (PLI + FTP + FTAs)
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Assembly scale ──► Export surge (phones)
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Imported chips & parts ──► Wider electronics deficit

Fig.: Assembly-led export growth also raises import demand

The electronics surge shows that well-targeted industrial policy can change India's export basket. To deepen the shift, incentives should move from assembly to components. India should also use its trade-agreement partners to source and sell components [2], and should track export growth excluding oil and gold. This is how Make in India can become true self-reliance, in line with SDG 9 (industry, innovation and infrastructure), and how the 2030 target can come within reach.