India’s electrical equipment industry could witness major expansion over the next decade, backed by rising domestic demand, rapid electrification, renewable energy adoption, and growing export opportunities, according to a new report by McKinsey & Company.
The report, titled “Wired for Growth: India’s Electrical Equipment Opportunity”, stated that India’s domestic electrical equipment production could rise to between USD 195 billion and USD 235 billion by 2035, compared to nearly USD 50 billion in 2025.
According to the report, domestic consumption of electrical equipment is projected to increase to USD 170-205 billion by 2035, while exports could cross USD 60 billion as India strengthens its manufacturing capabilities and global presence.
The report estimated that the industry could grow at an annual rate of 11-13 per cent through 2035, supported by rising demand in sectors such as renewable energy, power electronics, batteries, and grid infrastructure.
Amit V Gupta, Senior Partner at McKinsey & Company and co-author of the report, said India has already demonstrated its ability to achieve global leadership in sectors such as IT services and auto components.
“In sectors such as IT services and auto components, India has already demonstrated that global leadership is achievable when policy, entrepreneurship, and innovation align. Adapting a similar approach to the electrical equipment sector could support the country’s transition from being a major consumer of electricity to becoming a significant player globally in the technologies that enable its delivery,” he said.
The report noted that India’s electrical equipment market has expanded steadily in recent years, with domestic consumption reaching USD 59 billion in FY2025 after recording an 11 per cent compound annual growth rate over the past five years.
However, it also flagged growing import dependence in the sector, which increased from 22 per cent in 2020 to 33 per cent in 2025.
Under a “business-as-usual” scenario, the report warned that import dependence could exceed 70 per cent by 2035, resulting in a production shortfall of more than USD 130 billion.
To address this challenge, the report recommended a five-fold expansion in domestic manufacturing capacity, especially in power electronics, batteries, air-conditioner compressors, solar photovoltaic cells and modules, transformers, and cables and wires.
The report identified power electronics, batteries, solar PV, and subcomponents as key areas where localisation efforts could sharply reduce import dependence. It projected that India could bring down import dependence from the current 33 per cent to below 14 per cent by 2035 through aggressive capacity expansion and localisation.
Bhavesh Mittal, Partner at McKinsey & Company and co-author of the report, said stronger domestic manufacturing would be essential to avoid large-scale import dependence.
“Business-as-usual will not be enough. Without a step-change in domestic manufacturing, India could face a USD 130 billion production shortfall and import dependence above 70 per cent by 2035. Avoiding this outcome will require a five-fold expansion in domestic capacity, especially in power electronics, AC compressors, and the solar value chain,” he said.
The report also highlighted emerging growth areas such as renewable energy equipment, subsea and high-speed rail cables, grid stabilisation technologies, power electronics, and power software.
It estimated that renewable energy equipment and high-end cables alone could create a global opportunity worth USD 350-400 billion by 2035, while the global power electronics market could exceed USD 140 billion.
-ANI
