SIDBI’s “MSME Outlook Survey” provides valuable insights into MSME business sentiment across various sectors, tracking business performance and future expectations. The survey revealed that business confidence in the manufacturing sector is particularly high, with the Manufacturing Business Conditions Index (M-BCI) recording a strong reading of 60.33. The Services sector follows closely with an M-BCI of 59.67, indicating a positive outlook in both areas.

The survey’s MSME-Business Expectations Index (M-BEI) projects consistent optimism over the next four quarters, especially in manufacturing, where the index exceeds 70. Expectations for sales growth are strong, driven by an increase in order books, production, and selling prices. Many MSMEs are also optimistic about improvements in skilled labor availability, access to finance, and overall business conditions.

However, despite the positive outlook, some MSMEs are concerned about rising input costs, particularly in manufacturing. Nonetheless, the survey suggests that many expect profit margins to rise due to higher production volumes and increased average selling prices.

The survey also found that around one-sixth of respondents in all sectors expressed dissatisfaction with labor productivity and the availability of skilled labor. However, they are hopeful for improvement over the coming year. Additionally, a growing number of MSMEs are willing to invest in environmental protection measures and new technologies, which could further contribute to their growth and sustainability.

Overall, SIDBI’s survey shows that MSMEs are optimistic about the future, with a strong focus on workforce expansion, technological adoption, and business growth.

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Other major contributors to the current production include consumer electronics and industrial electronics, each accounting for 12 percent, followed by electronic components at 11 percent. Emerging segments such as automotive electronics, LED lighting, wearables and hearables, and PCBAs contribute the remaining share.

This ambitious growth trajectory is expected to create 12 million jobs by 2027, with 3 million of these being direct roles and the remaining 9 million in indirect positions. Among the direct jobs, nearly 1 million will be for engineers, 2 million for ITI-certified professionals, and 200,000 for specialists in high-demand fields like artificial intelligence (AI), machine learning (ML), and data science.

Indirect employment, largely focused on non-technical roles, will make up the majority of job opportunities, underscoring the electronics sector’s potential to spur economic growth and open a variety of career paths across India.

However, despite its optimistic outlook, the sector faces a major challenge: a critical talent gap. The shortage of skilled professionals is a key obstacle that could hinder the sector’s growth and its ability to meet ambitious production targets. Bridging this gap is vital for India to strengthen its position in the global electronics supply chain.

The solution lies in aligning workforce skills with the specific needs of the industry, particularly in high-demand areas such as semiconductors, electromechanical parts, and both passive and active components. This requires targeted skilling programs to fill the talent gap and ensure that India’s workforce is well-prepared to support the sector’s ambitious goals.

AR Ramesh, CEO of TeamLease Degree Apprenticeship, emphasized the need for focused skilling initiatives, noting, “Scaling apprenticeship enrollments, currently growing at a 55 percent compound annual growth rate (CAGR) and projected to reach 1 million apprentices by 2027 and 2 million by 2030, will be essential in creating a robust talent pipeline.”

He further added, “To become a global leader in electronics manufacturing, India must combine skilling efforts with strategic investments in infrastructure, policy interventions, and innovation.”

Sumit Kumar, Chief Strategy Officer at TeamLease Degree Apprenticeship, stressed the importance of building capacity to meet the growing demand for skilled professionals. “Employers and industries can support this initiative by setting up in-house training centres and collaborating with academic institutions through Work-Integrated Learning Programs (WILP) and degree apprenticeships,” he explained.

The path to India’s vision of becoming a global leader in electronics manufacturing requires a multifaceted approach. This includes boosting ITI enrollment, establishing in-house training centres, and expanding apprenticeship opportunities. Additionally, scaling reskilling and upskilling programs for over 50 percent of the workforce will be critical to bridging the skills gap and enabling sustainable growth.

In conclusion, the Indian electronics sector stands on the cusp of rapid growth, and with the right investments in skilling, infrastructure, and policy, it has the potential to become a global leader in manufacturing. By focusing on capacity building and industry-academia partnerships, India can successfully navigate the talent shortage and continue its journey toward becoming a major player in the global electronics supply chain.

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