The Great Component Shift: Pritam Deuskar on India's Export Opportunity Beyond Finished Goods

 India’s manufacturing opportunity is shifting from assembly to value capture. As global OEMs diversify supply chains and demand more complex products, the companies supplying critical, difficult-to-replace components could capture a growing share of the value chain.

Stay with us and keep reading as Pritam Deuskar, CIO, Wealthyvia Ventures and SEBI-registered research analyst, explores how India’s next manufacturing opportunity may lie not in assembling more, but in becoming indispensable to what the world manufactures.

For years, India’s manufacturing success has been measured by the finished products it can assemble and export. But the more important question is: who captures greater value—the company assembling the final product, or the company supplying the critical component that the entire product depends upon? Increasingly, the answer points to the latter. India’s next manufacturing opportunity may therefore lie not simply in making more finished goods, but in building the component ecosystem underneath them.

Global manufacturing is shifting from concentrated production toward diversified supply chains. China+1, geopolitical tensions, supply-chain resilience and rising product complexity are encouraging global OEMs to source critical components from multiple geographies. This creates an opportunity for India to move beyond assembly and become a second major manufacturing and component-sourcing hub alongside China, Vietnam, Taiwan, Mexico and Malaysia.

The economics of components are particularly attractive when they are technically complex, difficult to qualify and expensive to replace. Precision-machined parts, aerospace and defence components, EV systems, PCBs, sensors, power electronics, semiconductor-related equipment, industrial automation products and specialised materials can command better economics than commoditised assembly because customers value quality, reliability, engineering capability and continuity, not merely price. Once qualified, suppliers can remain embedded in customer platforms for years, creating recurring orders, switching costs and opportunities to expand from a component into a sub-assembly or complete system.

India is beginning to build precisely this ecosystem. Electronics provides an early indication: domestic electronics production has risen nearly six-fold since FY2014-15, while government policy is now increasingly focused on components, sub-assemblies, materials and manufacturing equipment. The Electronics Components Manufacturing Scheme has attracted investment commitments of ₹1.15 lakh crore against a ₹59,350 crore target, highlighting the scale of localisation underway. Across 14 PLI sectors, cumulative investment had exceeded ₹2.40 lakh crore and exports ₹15.2 lakh crore by March 2026, demonstrating that manufacturing capacity is increasingly translating into global supply-chain participation.

The opportunity extends well beyond electronics. Auto and EV components, aerospace, defence, semiconductor equipment, precision engineering, heavy electricals, renewable-energy equipment, medical devices and industrial automation are all benefiting from the combination of global supply-chain diversification and India’s domestic industrial expansion. Engineering-goods exports reached $54.1 billion during January-May 2026, up 10.9% year-on-year, providing further evidence of India’s growing participation in global manufacturing.

More importantly, these forces can reinforce one another. As global OEMs establish or expand production in India, they create demand for a wider network of domestic suppliers. Those suppliers gain scale, technical know-how and customer qualifications, allowing them to compete for export programmes and reduce India’s dependence on imported components. Over time, the strongest companies can move beyond individual parts into higher-value sub-assemblies and systems, increasing their share of the customer’s spending while simultaneously improving engineering content, margins and returns on capital.

This is where the investment opportunity becomes most interesting.

“Investors should not simply identify companies adding the most capacity. They should identify businesses manufacturing critical, difficult-to-replace components with high qualification barriers, strong engineering capabilities, sticky customers and meaningful export or import-substitution opportunities.” -Pritam Deuskar Weathyvia.

The greatest value creation is likely to occur where companies can continuously move up the value chain—from component to sub-assembly and eventually to system-level manufacturing.

Investment Conclusion

The most important change in India’s manufacturing story may therefore be where value is created, rather than simply how much is manufactured.

Assembly capacity can be replicated. A deeply integrated component ecosystem is much harder to build. It requires years of supplier development, engineering expertise, quality systems, tooling, testing, customer validation and production experience. Once that ecosystem develops, it can create a reinforcing advantage: global OEMs bring demand, local suppliers build capability, capability attracts more global programmes, and increasing scale makes Indian suppliers progressively more competitive.

This creates an opportunity for India to capture a larger share of the manufacturing value chain, rather than merely a larger share of manufacturing volumes. The winners could be companies that begin with a relatively small component, become embedded in a customer’s platform, expand into adjacent products and ultimately become strategic suppliers across multiple programmes and geographies.

“That is the real “component shift”: India’s manufacturing opportunity is moving from assembling what the world designs to supplying what the world’s manufacturers cannot efficiently produce without.” - Pritam Deuskar, Wealthyvia Ventures

If this transition continues, the next decade could see Indian component manufacturers evolve from fragmented domestic suppliers into globally scaled, engineering-led businesses. For investors, the opportunity is not simply higher manufacturing volumes—it is the potential for structural gains in value addition, market share, margins and ROCE as Indian companies move closer to the core of global production.

About Pritam Deuskar

Pritam Prabodh Deuskar is a SEBI-registered research analyst. Pritam has worked in stock market research and business analysis for many years. He had earlier worked with reputed portfolio management companies and PMS houses. His views, interviews and articles have been published in all leading financial newspapers and TV channels like CNBC, CNBC Bazaar, Moneycontrol, Economic Times, Business Standard and so on. Pritam Prabodh Deuskar is known for small and mid-cap multibagger companies and finding them at a very early stage has been his forte. He has worked with HNI and Institutional clients.

About Wealthyvia Ventures

Wealthyvia Ventures is a SEBI-registered AIF Category III Fund headquartered in Mumbai. The firm is dedicated to delivering high-quality public market investment solutions to Ultra-high-net-worth individuals (UHNIs), Family offices, Institutions, and Fund of funds.