India’s information technology hardware segment is heavily dependent on imports of components and finished goods. After surveying Tamil Nadu’s hardware electronics sector, this article argues that the stagnation of the electronics hardware sectors stems from a failure to create backward linkages, a liberal import regime and a foreign direct investment policy that has focused on employment generation instead of capability building. The study highlights the import-intensive nature of the industry, identifies skill gaps and infrastructural constraints faced especially by medium- and small-scale manufacturers.