India's EMS Sector Eyes Long-Term Growth Despite Current Challenges

360 ONE Capital remains optimistic about India's EMS sector, highlighting opportunities from semiconductor growth and value-added manufacturing. Despite weak consumer electronics demand, structural changes in the industry and supportive government policies are expected to drive future growth, with the sector moving beyond basic assembly to more complex operations.

Despite facing weak demand in the consumer electronics sector, 360 ONE Capital is bullish on the long-term prospects of India's electronic manufacturing services (EMS) industry. The firm points to increasing localisation, semiconductor opportunities, and a shift towards value-added manufacturing as key factors driving future growth.

In its latest sector update, the brokerage highlights a structural transformation that is set to support industry expansion for years to come. The report emphasizes growth themes such as rising RAC penetration, backward integration, and semiconductors, presenting a robust runway for the sector.

The report also underscores a transition within the Indian EMS industry from basic assembly operations to higher-value manufacturing activities. Government initiatives, such as ECMS and ISM 2.0, are playing a crucial role in this evolution, aiming to make India a self-reliant global manufacturing hub. While the consumer EMS segment faces demand issues, industrial EMS firms continue to perform well.