India's electrification push is driving huge demand for solar inverters, EV chargers and battery systems, but most products shipped under Indian brands are assembled from imported components. This piece looks at the component, talent, testing and procurement gaps that separate assembly from true engineering ownership, and what it will take to close them.
Summary: India's electrification push is creating enormous demand for power electronics: solar inverters, EV chargers, battery management systems, and industrial drives. Installed capacity is growing, orders are flowing, and policy incentives are stacking up. Yet most of what ships under an Indian brand is assembled from imported components. This article examines what separating assembly from engineering ownership actually requires, and what infrastructure, talent, and procurement decisions close that gap.
Table of Contents
The Scale of the Opportunity: India's Electrification Trajectory (2026-2030)
Why is India Not Able to Manufacture High-Quality Electronics Products?
The SKD/CKD Reality: How India's Incentive Schemes Define "Localisation"
Government of India Says India Is Manufacturing Many Smartphones: Are They Only Assembling the Phones After Importing Components From Other Countries?
The Component Gap: Magnetics, Capacitors, PCBs, Connectors and Sensors
The Talent Pipeline: From IT Services/GCC Delivery to Power Electronics R&D Ownership
Testing and Validation Infrastructure: The Missing Middle Layer
Procurement as a Localisation Lever: What Actually Rewards Ownership Over Assembly
The China Contrast: Industrial Policy Built on IP Ownership, Not Just Assembly
What Engineering Ownership Looks Like in Practice
India is adding renewable capacity at a pace that makes power electronics one of the fastest-growing hardware categories in the country. The upstream question is whether Indian companies own the engineering behind what they ship.
India crossed 200 GW of total renewable installed capacity in 2024 and has set a 500 GW non-fossil target for 2030. Solar alone accounts for the majority of new additions, and MNRE physical progress data shows quarterly installation rates running at levels that were annual records just five years ago.
Every gigawatt of solar capacity requires inverters. Every EV charging station requires a power conversion unit. Every grid-scale battery requires a battery management system with power electronics at its core. Industrial motor drives, HVDC interconnects, railway traction systems: the electrification wave touches all of them.
The demand picture is not in dispute. What is in dispute is whether Indian manufacturers are positioned to own the engineering behind the components that flow into that demand, or whether they will remain in the role of final assembler for technology developed elsewhere.
The stakes are not purely commercial. Power electronics sits at the intersection of energy security and industrial capability. A country that cannot design, test, and iterate on its own inverter topologies is dependent on foreign IP for the reliability of its grid.
India's electronics manufacturing gap is not primarily about labour costs or market size. It is about the absence of a deep component ecosystem, limited investment in applied R&D, and an incentive architecture that rewards final assembly over design capability.
A NITI Aayog analysis covered by The Print framed the issue directly: India has been chasing semiconductor fabrication as a prestige target while the more tractable gap, component-level engineering for the products India already sells, goes largely unaddressed.
Several structural factors explain the gap:
Ecosystem depth
High-quality electronics manufacturing requires a cluster of suppliers within a short logistics radius: passive components, custom magnetics, specialty PCBs, connectors, sensors. China's Pearl River Delta and Yangtze River Delta developed this depth over three decades. India has no equivalent cluster. A manufacturer who needs a custom-wound toroidal transformer on a two-week lead time either imports it or waits months for a domestic supplier to tool up.
Applied R&D investment
India's R&D spend as a percentage of GDP has remained below 0.7% for most of the last decade, with the private sector contributing a smaller share than peer economies. Power electronics is a discipline that advances through iterative testing: thermal cycling, EMI characterisation, topology benchmarking. That work requires equipment, time, and engineers willing to stay in hardware.
Incentive misalignment
Production-linked incentive schemes disburse on output value, not on the fraction of that value created domestically. A company can maximise its incentive claim by assembling high-value imported modules rather than by sourcing lower-margin domestic components. The scheme rewards the invoice, not the origin of the engineering.
Semi-knockdown and complete-knockdown assembly is classified as manufacturing under most Indian incentive frameworks. That classification obscures the difference between putting a product together and knowing how to design it.
SKD (semi-knockdown) assembly involves receiving a product in major subassemblies and combining them locally. CKD (complete-knockdown) involves receiving all components separately and assembling them. Neither requires the assembler to understand the design choices that determined which components were specified, or to be capable of modifying those choices for a different application.
India's PLI scheme for advanced chemistry cells, the ALMM framework for solar modules, and sector-specific incentives for telecom and electronics all use value-addition thresholds as their localisation metric. Value addition is measured as a percentage of the final product's selling price. The problem is that the most expensive components in a power electronics product, IGBTs and SiC MOSFETs, film capacitors, custom magnetics, precision sensors, are also the most engineering-intensive. Sourcing them domestically is hard; sourcing them from abroad and assembling them locally is easy. The incentive structure does not distinguish between the two.
The practical result is that companies can meet a 30% or 40% domestic value-addition threshold by controlling the sheet metal enclosure, the wiring harness, the display panel, and the PCB population, while importing the power semiconductor modules, the film capacitor banks, and the magnetic cores that determine how the product actually performs.
This is not fraud. It is rational behaviour in response to the incentives on offer. Changing the behaviour requires changing the incentives.
Yes, for the most part. India's smartphone export surge reflects successful final assembly, not a shift in where the engineering value is created. The pattern is directly relevant to power electronics.
India's smartphone exports crossed $15 billion in FY2024, a number cited frequently as evidence that the PLI scheme for mobile phones has worked. In terms of attracting final assembly to India, it has. A significant share of premium smartphones sold globally now have an "Assembled in India" marking.
What that marking does not capture is that the camera modules, display panels, processors, memory chips, and power management ICs inside those phones are almost entirely imported. The value of what India adds in the assembly step is a fraction of the total product value.
Electronics For You's analysis of India's electronics value chain puts the point plainly: India's electronics manufacturing is heavily concentrated at the low-value end of the production curve. The engineering and component manufacturing that accounts for 60 to 70% of product value continues to happen elsewhere.
For power electronics, the analogy is direct. An inverter that ships from a factory in Rajasthan or Karnataka may be predominantly assembled from power modules produced in Germany or Japan, capacitors from China or Germany, and magnetic cores from China or Taiwan. The PCB may be fabricated in China and populated in India. The topology design, firmware, and protection algorithms may be licensed from the module supplier.
None of this is inherently disqualifying. Assembly creates jobs, builds logistics capability, and generates the cash flow that can, if reinvested deliberately, fund the deeper capability development over time. The question is whether there is a deliberate plan to use the assembly phase as a bridge to ownership, or whether the bridge never gets built.
The five passive and semi-passive component categories that determine power electronics performance are all dominated by imports. India's Electronics Components Manufacturing Scheme is the first policy specifically designed to address this, with a leverage ratio built into its structure.
Power electronics performance, including efficiency, thermal management, reliability, and EMI compliance, is determined less by the power semiconductor (the part that gets the marketing attention) and more by the passive components around it.
Magnetics
Custom inductors and transformers for power conversion require core materials (ferrite, nanocrystalline, amorphous) and winding specifications that are application-specific. India has a small domestic magnetics industry, but it is predominantly serving commodity applications. High-frequency magnetics for GaN and SiC-based designs are almost entirely imported.
Film and electrolytic capacitors
DC link capacitors in an inverter are life-limiting components. Their voltage rating, ripple current capability, and thermal characteristics directly affect product reliability. High-performance film capacitors are produced by a small number of European and Japanese manufacturers. India has no equivalent production base.
PCBs
High-layer-count, impedance-controlled PCBs for power electronics control cards are not produced at scale in India. The PCB fabrication capacity that exists is oriented toward simpler boards.
Connectors and sensors
Application-specific connectors (DC combiner boxes, battery interconnects, EV charging connectors) and current sensors (Hall effect, Rogowski coil) are largely imported.
India's Electronics Components Manufacturing Scheme (ECMS) is the first incentive scheme explicitly targeting this gap. The scheme is designed to target approximately Rs 7.68 in production value for every Rs 1 of investment, a leverage ratio derived from its Rs 4.56 trillion production target against Rs 59,350 crore of planned investment. That ratio signals the policy intent: the scheme is not primarily a subsidy mechanism but a demand signal intended to anchor component supply chains in India.
Whether the signal translates into investment depends on whether the anchor customers, inverter manufacturers, EV charging OEMs, and industrial electronics companies, commit to long-term domestic sourcing agreements that give component manufacturers a reason to tool up. Zenergize's analysis of why Indian rooftops need SiC inverters outlines the performance requirements that set the specification bar for the magnetics and capacitors that would need to be sourced domestically.
In short: India has a large electronics engineering graduate population and a growing GCC presence. Neither automatically translates into power electronics R&D capability. The transition requires deliberate investment in applied hardware engineering roles.
India graduates approximately 1.5 million engineers annually, with electronics and electrical engineering among the largest disciplines. India also hosts a substantial share of global GCC (Global Capability Centre) activity for technology companies.
Nasscom's GCC landscape report documents India's position as the dominant destination for offshore engineering centres. Semiconductor design, embedded software, and verification work have been performed in India at scale for two decades.
The gap is in applied power electronics hardware. The GCC model delivers engineering work defined upstream: an Indian team executes a design specification that was developed elsewhere. That is valuable, but it does not build the capability to originate design decisions, to choose a topology, specify a switching frequency, determine a thermal management strategy, and validate the result against application requirements.
Power electronics R&D requires a specific combination: electrical engineers with postgraduate specialisation in power conversion, access to high-voltage lab infrastructure, and the organisational patience to work through multi-year design-validate-iterate cycles. The IT services model, which optimises for rapid delivery of well-defined work, does not cultivate this.
Several things are changing this. The energy transition is creating demand for power electronics talent that is visible and career-defining in a way that it was not five years ago. Indian startups and mid-sized manufacturers are beginning to build in-house firmware and hardware teams rather than licensing designs. The GCC model itself is evolving, with some centres taking on more origination work. But the talent transition is measured in years, not quarters.
India lacks the density of accredited test and validation infrastructure that product development requires. Getting a new inverter topology from prototype to certified product is significantly harder in India than in Germany or China.
Product development in power electronics is iterative. A new topology goes through bench testing, thermal characterisation, EMI pre-compliance, environmental stress testing (temperature cycling, humidity, vibration), and finally formal certification against IEC or BIS standards. Each of these steps requires specialised equipment and, in many cases, accredited third-party facilities.
India has national test laboratories (NABL-accredited facilities and the CPRI network) but the density and specialisation of testing infrastructure available to a mid-sized manufacturer developing a new product is thin compared to peer ecosystems. A company in Shenzhen or Stuttgart can access EMI chambers, thermal shock chambers, and power quality analysers within a 30-minute drive. An equivalent company in Bengaluru or Pune faces longer lead times, higher per-test costs, and in some cases the need to send prototypes abroad for specific tests.
This is not a permanent condition. Testing infrastructure investment follows product development investment, and both are increasing. Zenergize's transformerless inverter development required navigating exactly this infrastructure gap: the experience of building a new product category in India against the constraints of available test capacity.
The missing middle layer is not the national labs (which serve the certification function) or the in-house benches of large manufacturers. It is the accessible, fast-turnaround, specialised test capacity that early-stage and mid-market manufacturers need to run the iteration cycles that produce better products. Addressing this gap requires either anchor investment by large players in shared infrastructure or a targeted policy instrument that subsidises commercial test lab capacity.
Procurement decisions by large energy project developers, public utilities, and government-backed buyers are more powerful localisation instruments than incentive schemes. Specification requirements that reward demonstrated domestic engineering capability create the market pull that policy cannot generate alone.
India's solar and EV charging build-out is substantially driven by large procurement programmes: solar park tenders, NTPC and SECI procurements, DISCOMs purchasing smart meters and distribution automation, state governments procuring EV charging infrastructure.
These procurement programmes set the specifications that define what counts as acceptable. If a tender specifies "BIS-certified inverter with minimum X% domestic value addition," it sets a floor. If the same tender adds "inverter topology designed and validated in India" or "firmware developed and owned by the Indian entity," it sets a ceiling that assembly-only players cannot meet.
Procurement-driven localisation has worked in other sectors. The Indian Railways' long-standing practice of specifying components that must be designed and manufactured domestically, including locomotive traction motors, signalling equipment, and rolling stock, created domestic capability over time because the market was large enough to justify the investment.
Zenergize's DC fast charger localisation work demonstrates what procurement-driven capability development looks like for a specific product category: the specification requirements of large fleet operators and highway corridor developers are driving charger OEMs to build domestic engineering capability because the market size justifies the investment.
For this to scale, large buyers need to add engineering-origin requirements to their specifications, not as compliance theatre, but as genuine evaluation criteria with audit mechanisms.
China's power electronics industry was built through a deliberate industrial policy that required technology transfer, funded domestic R&D, and mandated domestic sourcing in public procurement. The result was not just cheaper products but IP ownership that has made Chinese OEMs globally competitive on performance, not just price.
China's journey in power electronics is instructive precisely because it was not accidental. The policy instruments were explicit: joint venture requirements that mandated technology transfer as a condition of market access, national standards development that Chinese companies participated in shaping, government-funded applied research institutes that bridged academic research and industrial application, and public procurement requirements that created the initial market for domestic products even when they were not yet cost-competitive with imports.
The outcome is visible in the current market. Chinese power electronics OEMs, in solar inverters, industrial drives, and EV charging equipment, now compete globally on performance and reliability, not just on price. The technology gap that existed in the early 2000s has been substantially closed or reversed in several product categories.
India's policy architecture borrows some of these instruments but applies them less systematically. PLI schemes create output incentives. BIS certification requirements create domestic market access barriers. But the technology transfer mechanisms, the applied research bridge, and the procurement requirements that create market pull for domestic IP are all weaker or more fragmented than their Chinese equivalents.
The lesson is not that India should replicate China's policy exactly, since the economic contexts differ significantly. The lesson is that the countries that have moved from assembly to IP ownership in electronics manufacturing did so through deliberate policy design, not through market forces alone.
Engineering ownership is not a credential. It is a set of specific organisational capabilities: in-house topology design, firmware ownership, test-validated IP, and the ability to adapt a product for a new application without going back to an external design partner.
The distinction between assembly and engineering ownership becomes concrete when something goes wrong or when the application changes.
An assembler who encounters a reliability problem in the field has limited options: report it to the component supplier, wait for a firmware update, or replace the assembly. An engineering owner can instrument the product, identify the failure mode, modify the protection algorithm, validate the fix, and deploy it without external dependency.
An assembler who wants to enter a new application segment, say from rooftop solar to industrial UPS, or from AC charging to DC fast charging, needs to either licence a new design or negotiate with a new component supplier for an application-specific configuration. An engineering owner can adapt the topology, modify the control loop, recharacterise the thermal performance, and go to market with a differentiated product.
This capability difference is what makes engineering ownership strategically valuable beyond its direct commercial benefits. It is the difference between being a market participant and being a market maker.
For India's power electronics sector, the path to engineering ownership runs through several simultaneous investments: component ecosystem development (ECMS as the current instrument), talent development (reorienting engineering careers toward applied hardware), testing infrastructure (shared capacity for iteration), and procurement specification reform (requiring demonstrated domestic engineering, not just domestic assembly).
None of these is a quick intervention. Collectively, they define what it would mean for India to move from assembling the electrification wave to engineering it.
India's electrification trajectory is one of the largest infrastructure build-outs in the world. The power electronics industry that serves it will be shaped by decisions made in the next three to five years: which component categories get anchored domestically, which engineering roles get invested in, which procurement specifications get written to reward ownership over assembly. Zenergize designs and validates its inverter and EV charging products in India, including firmware, topology, and thermal management, because we believe that engineering ownership is what gives Indian infrastructure the reliability it needs over a 20-year asset life. If you are evaluating power electronics for a project that requires that kind of accountability, get in touch.
Written by
Navneet Daga
Co-Founder & CEO at Zenergize. IIT alumni. 16+ years of experience with Accenture, Delhivery, SuperPlum etc. Building India’s first indigenous SiC solar inverter.
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