Shipments of domestically manufactured smartwatches declined 23% YoY in 2025 YTD (Jan-Sep), driven by a broader slowdown in the overall smartwatch market, which itself recorded a 27% YoY drop in the same period. While the TWS segment in general declined by 3% YoY, shipments of domestically manufactured TWS declined by 10% YoY as imports increased due to shifts in consumer preference toward brands like OnePlus, realme and JBL that depend on imports.

While the domestic manufacturing has declined in quantitative terms, this does not point toward a generalized distrust of Indian manufacturing capabilities. It is more about the general market dynamics.

• Brand dynamics and movement inwards: Indian brands like boAt and Noise, which tend to manufacture locally through Indian manufacturers Optiemus, Dixon and Il Jin have witnessed degrowth. Another trend is some brands setting up in-house manufacturing units. Noise has formed a JV with Il Jin, known as Stelltek. Similarly, GoBoult has shifted a significant portion of its manufacturing in-house. However, for its TWS portfolio, it has onboarded a new manufacturing partner, Staunchtech. A key driver behind the move towards in-house manufacturing is the greater control it offers over production processes, quality and timelines.
• New partnerships to boost domestic manufacturing: Global companies like realme, OPPO and Xiaomi have this year entered the Indian domestic manufacturing space by aligning with Indian companies like Optiemus and Bhagwati Enterprises. Xiaomi declared that it would get smartwatches made by Optiemus, while realme indicated that it wanted to increase its domestic manufacturing for all its AIoT products and had already begun production of TWS. OPPO has partnered with Bhagwati for TWS as an extension of its already existing partnership for smartphones. All these partnerships indicate a growing trust in Indian manufacturers.
• Entry of new manufacturers and scaling up: Not only are we seeing new partnerships, but a significant scaling up of new manufacturers. MCM, in partnership with Fire-Boltt and Timex, has seen a significant growth of 1561% YoY YTD in the smartwatch space, while Salcomp orders from Fastrack have surged, leading to a 643% YoY YTD growth for it. An important entry in this space has been Apple through its Foxconn subsidiary Hon Yi. TWS devices have so far largely been made for domestic consumption, but with the establishment of Hon Yi, we also see export potential in the next few quarters. Hon Yi already has plans to expand to 200,000 units per month from the current capacity of 100,000 per month.

Price band dynamics

TWS: Another interesting shift emerging in the domestic shipment price bands is the manufacturing of higher-value models. Models priced above INR 2,000 have increased their share to over 5%, reflecting a rise in manufacturing of mid-premium and premium devices with boAt as a primary contributor. The establishment of Calofinix boAt’s joint venture with Dixon has been one of the factors contributing to this shift. Not only boAt but Noise and Mivi have also increased their share in this segment. We expect that with the entry of realme and OnePlus in domestic production, the share of models priced above INR 2,000 will increase. Additionally, now that Apple has entered the fray, we may see a greater share of domestic manufacturing in ultra-premium price segments as well.

Smartwatch manufacturing has also seen a trend towards premiumization, but the change here is minute. At the same time, domestic manufacturing did witness growth in the mid-price segment with the entry of Fastrack and Titan and the growth of Noise watches. Dixon is the only EMS that has been making ultra-premium watches, mainly for Samsung.

R&D, partnerships and component depth

Dixon’s partnership with boAt is not aimed at pure-play assembly operations through their JV Califonix and also aims to grow R&D. boAt too has not restricted itself to just assembly operations but increased in-house designing through acquisitions like KaHa in 2022¹. It has also co-developed an AI-enabled SoC chip, Indus 1011, with HrdWyr² for consumer electronics. It is already making 5 million PCBAs.

Similarly, Dixon has formed a JV with Longcheer called Dixtell Infocom, whose focus will be on supplying a wide range of electronics like smartphones, TWS, smartwatches and PCs. This partnership is expected to go beyond assembly into components, given that Longcheer is a supplier for brands like Xiaomi and OPPO. Bhagwati’s partnership with Huaqin will be essential for its foray into the production of OPPO and OnePlus earbuds.

Optiemus has similarly partnered with Nothing for the manufacturing of CMF phones in India. This partnership in the future may also include more collaborations on research and design related to hearables and wearables.

Policy environment

The Phased Manufacturing Program (PMP) had the hearables and wearables segment specifically mentioned, which helped in the growth of domestic manufacturing for these devices. The current tariff on both hearables and wearables is 20%, while it is 10%-20% for components like batteries and displays. A reduction in customs duty on sub-components is important to encourage more local value addition. However, there has not been any specific government scheme since the PMP that has targeted these devices specifically.

The recently launched Electronics Component Manufacturing Scheme (ECMS) is expected to help increase local value addition, especially in multi-layer PCBs. This will further benefit major players like Il Jin, which specializes in PCB manufacturing and has also gained approvals under the scheme. This specialization has strengthened its partnerships with Noise and boAt by enabling greater control over critical components.

Conclusion

India’s hearable and wearable manufacturing is expanding, albeit at a slower pace now. While the TWS segment still has scope to grow, it will require more enhanced investments. The smartwatch segment already has a significant share of domestic manufacturing. Partnerships with global brands by local manufacturers such as Optiemus and Dixon will help in increasing trust in their capabilities. The other strategy to gain more clients will be to develop components, as Il Jin and Califonix are doing. Further, the entry of global brands like Foxconn and Apple may also mean more technology transfer to existing brands. R&D partnerships and chipset development will also be essential, especially as India’s semiconductor ambitions also kick in.

1.     Acquisition of KaHa was aimed at enhancing its end-to-end IoT solutions for wearables, including hardware, software, AI/ML algorithms and data analytics

2.     Indus 1011 is optimised for earbuds and wearables, enabling features like adaptive power optimization and seamless AI integration

*For our analysis, we have used 2025 YTD (January-September)