From fragile components to AI-powered foresight, what it takes for India’s electronics manufacturing to scale globally, stay resilient, and thrive in a BANI world?
Supply chains are usually invisible in normal day-to-day life. When we purchase a cold beverage such as Coca-Cola or Pepsi, we do not encounter out-of-stock conditions. It is not by chance that this reliability is achieved. It has a highly connected supply chain that operates for more than 250 days per year. Notably, the supply chain does not merely refer to the process from a supplier to a buyer. It spans the product lifecycle, from the extraction of raw materials from the earth through manufacturing and consumption, and ultimately back to the earth through waste and recycling. This end-to-end view characterises a resilient supply chain.
This is particularly concerning in the electronics industry, especially in electronic manufacturing services (EMS). Although EMS has existed in India for years, it has become much more visible in recent years due to policy support, shifts in global supply, and increasing domestic demand, particularly in aerospace, defence, and strategic electronics.
The rise of electronics manufacturing in India
The electronics manufacturing industry in India encompasses the manufacture of high-tech satellites and low-tech household electronics such as watches. The industry is estimated to be worth $61.85 billion currently and is projected to reach nearly $348.17 billion by 2031, with a compound annual growth rate of approximately 28%. According to other estimates, the electronics manufacturing and design opportunity is approximately $310 billion.
This is due to aggressive government policies over the last 10 years that have focused on domestic manufacturing, thereby contributing to this rapid growth. Mobile phones account for the highest share, at more than 65%, followed by consumer electronics, telecom, automotive, and medical devices.
Interestingly, the majority of well-known consumer brands and mobile phone companies do not manufacture their own products. OEMs (original equipment manufacturers) also outsource to EMS companies that are exclusively production-oriented. This model is commonly known as build-to-print, in which the design is provided, and manufacturing is carried out with accuracy and efficiency. EMS companies are experts in manufacturing excellence, not in product design.
The BANI world and supply chain fragility
The current world ecosystem can only be characterised by the BANI model: brittle, anxious, non-linear, and incomprehensible. Systems might seem to be stable at first sight, but when some minor disturbances occur, they can fall apart.
A good example is electronics supply chains. A factory might seem ready to go into production, but the lack of a single low-cost part will halt the whole process, and the high-value product cannot be delivered. A ₹100 part can halt billing for products worth ₹ 100,000. This skewed effect underscores the non-linearity of contemporary supply chains.
Uncertainty in geopolitics, dynamic regulations, and an unpredictable world contribute only to anxiety. Unpredictability is caused by events such as changes in trade policies or prolonged geopolitical disputes. Simultaneously, the industry faces a talent shortage that must be addressed through collaboration between academia and industry. They both serve society and must be oriented towards the common national objectives, such as the vision of India becoming a developed country by 2047.
Why traditional systems fall short
Separating data by department is a major challenge in EMS operations. The production, engineering, procurement, and supply chain teams often operate in silos. Communication is slow, paper-based and reactive. When shortages are detected, lead times have already risen to weeks or months.
This weakness was revealed by the semiconductor shortage following the COVID pandemic. Delays in components such as FPGAs or small relays halted entire projects, even when most components were available. The system was incapable of foreseeing the problems before they arose.
AI as a strategic necessity
Artificial intelligence (AI) offers a solution by transforming manual supply chain management into an intelligent, digital, and automated system. AI in EMS operations can be used to forecast demand through machine learning, predict shortages, manage obsolete components, and plan smart inventory for thousands of parts.
The procurement cycles are minimised, quoting is more accurate, and decisions are based on real-time information rather than assumptions on AI-driven platforms. The automated processes replace time-consuming manual approvals; sourcing is quicker, and production schedules are better aligned with component availability. Physical gains of AI-driven supply chains have been demonstrated to include a 20-40% reduction in shortages, a 10-12% increase in on-time delivery, and a 15-30% reduction in surplus or non-utilised inventory. These efficiencies are directly translated into lower costs, greater revenue potential, and higher customer satisfaction.
End-to-end visibility and collaboration
Current AI systems offer only a single dashboard that provides full visibility into the supply chain. Since it is possible to identify part numbers from drawings, determine supplier availability, lead times, prices, logistics, and delivery status, all the information is available in a single location.
This openness builds confidence among stakeholders. Collaboration, built on trust, enhances product quality and productivity. OEMs trust EMS partners, and EMS companies can make commitments to realistic delivery schedules supported by data.
Aerospace and defence are industries with high demand for traceability and compliance, and AI platforms can be used to track components end-to-end and manage certification. Some variables considered in demand forecasting for the automotive manufacturing industry include income trends, regulations, and interest rates. Across industries, AI improves readiness to introduce new products and reduces bill-of-material risks.
The road ahead
The use of automation and AI in supply chains is no longer a choice for EMS companies. To be competitive in the complex and uncertain world, they are necessary. Although change is a long process, and no company can become a global leader overnight, India already has strong EMS players in the consumer electronics, automotive, aerospace, and defence industries.
With more complex supply chains, AI will be the intelligence required to mitigate uncertainty, enhance resilience, and add greater value to society. The industry goal has never been different after all, to deliver the best possible value to the customer at the lowest possible cost, effectively, sustainably and reliably.
The article is based on a talk at the EFY Expo Gujarat 2025 called ‘Creating Value for EMS Industries with AI-powered Supply Chains’, delivered by Manesh Pratap Singh, Managing Consultant, MDRM Consultants, on 22 November 2026. It has been transcribed and curated by Vidushi Saxena, Journalist at EFY.
