In early January, the government approved investments of nearly Rs 50,000 crore to manufacture mobile enclosures—those metal frames on which phone components are mounted. 

Why spend so much money on simple grids of metal? 

Well, because it’s all part of the government’s push to build the missing middle of the electronics supply chain through its electronics component manufacturing schemeLivemint. The intent is to deepen India’s component ecosystem to eventually pave the way to self-reliance.

Meanwhile, electronics-manufacturing-services (EMS) players themselves—from Dixon Technologies to Tata Electronics—have only just started thinking about things like component self-sufficiency. Or for that matter, even design capability, R&D depth, and intellectual-property ownership. Until recently, their obsession began and ended with scale.

Look at it from their perspective. At every stage of the electronics value chain, scale is what unlocks the next level. “Without scale, R&D slows down, talent doesn’t deepen, and IP creation becomes unsustainable,” says Anand Dubey, founder and CEO of consumer-electronics company Indkal Technologies. 

Indian EMS players have chased this be-all-end-all through joint ventures (JV) with Chinese, American, and Taiwanese original design manufacturers (ODMUnlike a traditional factory that manufactures products according to client specification, an ODM already has blueprints, parts, and technology ready to go. Clients simply have to pick a product from their catalog, put their brand's logo on it, and start selling). They’ve brought home some of the biggest ODMs through JVs such as Dixon-Longcheer, Bhagwati-Huaqin, and Syrma SGS-Shinhyup Electronic. Courtesy of these, India made up around 3.5%Niti AayogNiti Aayog GVC Report 2024 of the world’s total electronics output in 2024. 

But what about those who’ve already hit a certain scale? For instance, Dixon, a 30-year-old company, is on track to produce around 40 millionUpstox smartphones in FY26, capturing over 50%India Manufacturing Review of India’s mobile outsourcing market. Yet, it spends less than 1% of its revenue on R&D, according to its annual reports.