The next export story: A $50 billion prize India can't afford to miss

India's telecom equipment industry is still a minor player in global trade. Annual exports of telecom and network equipment stand at just $0.6-1 billion, while imports are four to five times higher. But a new NITI Aayog assessment suggests this imbalance masks a much larger opportunity. With the global telecom equipment market expanding rapidly, India could emerge as a $50 billion export hub by 2035 if it can deepen local manufacturing, reduce dependence on imported components and move beyond low-value assembly.

Currently, telecom infrastructure is becoming a strategic industry as countries invest in 5G networks, fibre connectivity, data centres, AI infrastructure and future 6G technologies. India already has one of the world's largest telecom markets and has built a domestic digital ecosystem at scale. India can leverage that demand base to create a globally competitive manufacturing sector.

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Large domestic market, small manufacturing footprint

According to NITI Aayog, India's telecom and network equipment (TANE) market was worth around $25 billion in FY25 and is projected to almost double to $50 billion by FY32, implying annual growth of roughly 10%.

That domestic expansion is taking place against the backdrop of a much larger global opportunity. The worldwide telecom and network equipment market is expected to grow from about $498 billion in FY23 to $714 billion by FY30. This expansion will be driven by 5G rollouts, fibre deployments, cloud infrastructure, enterprise networking and growing investments in digital connectivity.

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Despite being one of the world's largest telecom markets by subscriber base, India remains a marginal exporter of telecom hardware. Between 2020 and 2024, telecom equipment exports accounted for just 0.2-0.3% of India's total merchandise exports, equivalent to $0.6-1 billion annually. Imports, meanwhile, stood at $4-5 billion a year and accounted for 0.7-1.1% of total imports.

The gap illustrates a larger challenge facing Indian manufacturing. The country has become a major consumer of telecom technology but remains heavily dependent on imported equipment and components.

The China problem

Perhaps the most striking finding in the NITI Aayog report is the degree of reliance on Chinese inputs.

More than 80% of critical telecom components used in India, including 4G and 5G antennas and signal processors, are sourced from China. That dependence persists despite years of policy efforts aimed at supply chain diversification and domestic manufacturing.

The issue extends beyond China alone. Modern telecom manufacturing is deeply globalised. A 5G base station assembled in India may use Taiwanese chipsets, Japanese optical transceivers and intellectual property cores designed in the United States. The result is a supply chain that stretches across multiple countries and remains vulnerable to geopolitical tensions, export controls, logistics disruptions and currency fluctuations.

The strategic implications have become more visible in recent years. Since the pandemic, governments around the world have increasingly treated telecom infrastructure as a matter of economic and national security. Supply chain resilience has become as important as cost competitiveness.

For India, reducing dependence on imported telecom equipment is not simply an industrial policy objective. It is also tied to technological sovereignty and the resilience of critical digital infrastructure.

Why Indian manufacturers struggle to compete

The challenge is not merely one of scale. Indian telecom equipment manufacturers also face structural cost disadvantages. NITI Aayog estimates that domestic companies manufacturing generic telecom and network equipment face a fiscal disability of up to 26% compared with global competitors operating in higher-value telecom manufacturing ecosystems. In product categories where imported equipment benefits from extended buyer's credit facilities, the disadvantage rises to as much as 29%.

Such gaps make it difficult for Indian firms to compete against established global manufacturers, particularly those backed by mature supply chains, export financing support and large-scale production ecosystems.

A related issue is low domestic value addition. In many telecom products, local value addition remains below 20%. Much of the activity taking place within India is concentrated in assembly rather than component manufacturing or technology development. As a result, a substantial share of the economic value continues to accrue outside the country.

This is a familiar pattern across electronics manufacturing. India has made progress in attracting assembly operations but has struggled to build deep component ecosystems comparable to those in China, Taiwan, South Korea or parts of Southeast Asia.

The export segments where India could build scale

NITI Aayog identifies several product categories where India could establish a stronger export presence. These include antennas, remote radio heads, baseband units, optical fibre cables and microwave transmission equipment. These are not niche products. They are core building blocks of telecom networks and will remain in demand as countries continue upgrading connectivity infrastructure.

India already possesses some advantages in these segments. The country has a sizeable domestic telecom market that can provide demand visibility. It has a large engineering workforce and a growing electronics manufacturing base. Indian firms also have experience in software-defined networking and telecom software, which can complement hardware manufacturing.

The government's telecom reforms over the past decade have also created a foundation for indigenous technology development. The push for homegrown 4G and 5G stacks, including efforts involving companies such as Tejas Networks and the telecom technology programme led by Centre for Development of Telematics, has demonstrated that domestic capabilities can be developed in strategic areas.

The challenge now is scaling those capabilities into globally competitive manufacturing and export businesses.

What policy support will be needed

The report argues that stronger government intervention will be necessary if India wants to capture a meaningful share of the global telecom equipment market.

Among the key priorities are deeper localisation of telecom components, stronger technology partnerships between Indian firms and global original equipment manufacturers, industrial clusters dedicated to telecom manufacturing and improved testing and certification infrastructure.

These recommendations align with a broader industrial strategy already visible across sectors such as electronics, semiconductors and renewable energy equipment.

India's Production Linked Incentive (PLI) programmes have demonstrated that targeted incentives can attract investment and expand production. In mobile phones, for instance, India has transformed from a net importer into one of the world's largest manufacturing locations, with exports rising sharply over the past few years. Policymakers increasingly see telecom equipment as the next logical frontier.

The focus is also consistent with India's wider export ambitions. The National Telecom Policy 2025 envisages a 150% increase in telecom manufacturing output and 50% import substitution. More broadly, the government has set an ambitious target of turning India into a major manufacturing and export hub across sectors.

A chance to move up the value chain

The significance of the telecom opportunity extends beyond the sector itself.

If India succeeds in building a globally competitive telecom manufacturing ecosystem, the benefits would spill over into semiconductors, electronics components, precision engineering, software and advanced research. The sector involves hardware, software and digital infrastructure, making it one of the highest-value segments within manufacturing.

NITI Aayog estimates that sustained policy support could raise telecom and network equipment's contribution to GDP to 1-1.5%, create around 500,000 skilled jobs and establish India as a $50 billion telecom export hub by 2035. Those numbers are ambitious. Achieving them will require far more than assembling imported components inside Indian factories. It will demand a deeper ecosystem encompassing design, component manufacturing, financing, testing and global market access.

But the opportunity is difficult to ignore. India currently exports less than $1 billion worth of telecom equipment annually. A rise to $50 billion would represent one of the largest manufacturing transformations attempted by the country in the coming decade. At a time when global supply chains are being redrawn and companies are actively seeking alternatives to China-centric production networks, the window may be more open than it has been in years.