India’s Electrical Equipment Industry Could Emerge to USD 235 billion by 2035: McKinsey report

• India’s electrical equipment production could rise from USD 50 billion in 2025 to USD 195–235 billion by 2035.

• Domestic demand may reach USD 170–205 billion; exports could exceed USD 60 billion.

• Industry projected to grow 11–13% annually, driven by electrification and renewables.

• Import dependence risks exceeding 70% without intervention.

• Five-fold capacity expansion and localisation are critical to global competitiveness.

  
  

India’s electrical equipment sector stands on the cusp of sweeping change, with new research pointing to the possibility of dramatic expansion over the next decade. A recent McKinsey & Company study suggests that a combination of rising domestic demand, strategic capacity building, and a decisive push to reduce import reliance could reshape the industry’s trajectory by 2035.

In its report, “Wired for Growth: India’s Electrical Equipment Opportunity,” McKinsey projects that domestic production could surge from roughly USD 50 billion in 2025 to between USD 195 billion and USD 235 billion by 2035. Such growth would represent a near fourfold increase, positioning India as a far more influential player in global manufacturing networks.

Domestic consumption is expected to climb in parallel. According to the study, India’s demand for electrical equipment could reach USD 170–205 billion by 2035. At the same time, exports may cross the USD 60 billion mark, reflecting India’s expanding role in international supply chains.

The industry is forecast to grow at an annual rate of 11–13 percent through 2035. This momentum is likely to be fuelled by accelerating electrification, wider adoption of renewable energy, expanding use of power electronics, and a strengthening export ecosystem.

Amit V Gupta, Senior Partner at McKinsey and co-author of the report, drew parallels with other industries where India has successfully established global credibility. He noted that sectors such as IT services and auto components flourished when policy direction, innovation, and entrepreneurship converged. Applying a similar formula to electrical equipment manufacturing, he suggested, could help India evolve from being primarily a large electricity consumer to a major contributor to the technologies that power modern economies.

Recent growth figures already underscore the sector’s potential. Domestic consumption reached approximately USD 59 billion in FY2025, following five years of compound annual growth of around 11 percent. However, this rapid expansion has also exposed structural vulnerabilities. Import dependence has increased from 22 percent in 2020 to 33 percent in 2025, indicating that rising demand is being met in part by overseas suppliers.

McKinsey cautions that if current trends continue without substantial intervention, import dependence could surpass 70 percent by 2035. Under such a “business-as-usual” scenario, India might face a production gap exceeding USD 130 billion—an outcome that could undermine both economic resilience and strategic autonomy.

To counter this risk, the report advocates a significant scaling up of domestic manufacturing capacity—by as much as five times current levels. Particular emphasis is placed on expanding production in areas such as power electronics, battery technologies, air-conditioner compressors, solar photovoltaic cells and modules, transformers, and cables and wires.

Four areas—power electronics, batteries, solar PV, and key subcomponents—are highlighted as especially promising for localisation. With sustained investment and policy backing, India could potentially reduce overall import dependence from the current 33 percent to below 14 percent by 2035.

Bhavesh Mittal, Partner at McKinsey and co-author of the study, emphasised that incremental improvements will not be sufficient. Without bold capacity expansion and targeted action in high-impact segments such as the solar value chain and advanced components, the country risks missing a pivotal opportunity.

The report also identifies several high-growth niches likely to shape the industry’s next chapter. Equipment linked to renewable energy, specialised cables for subsea and high-speed rail networks, grid-balancing technologies, advanced power electronics, and power management software are all expected to see strong demand.

On the global stage, the opportunity is substantial. Renewable energy equipment and premium cable solutions together could represent a market worth USD 350–400 billion by 2035. Meanwhile, the worldwide power electronics sector alone is projected to exceed USD 140 billion, offering Indian manufacturers a sizeable export prospect if they can compete effectively on cost and technology.

Ultimately, the report calls for close collaboration among policymakers, corporate leaders, and investors. Enhancing cost efficiency, strengthening technological capabilities, increasing research and development investment, and building robust export infrastructure will be critical to achieving scale.

If these elements come together, India’s electrical equipment industry could replicate the success stories seen in other sectors—transforming itself into a globally competitive manufacturing hub and playing a decisive role in powering the world’s energy transition.