Your access to the promising market of India
Electronics market of India is one of the fastest growing in the world and is anticipated to reach USD 400 billion in 2022 with domestic manufacturing climbing to over USD 100 billion.
India’s GDP is expected to grow at 7.5 percent in 2016 and 2017.
The Indian electronics and hardware market grew 8.6 percent YoY to reach USD 75 billion in 2015.
The Indian electronics and hardware industry is expected to grow at a CAGR (compound annual growth rate) of 13 percent–16 percent during 2013–2018 to reach USD 112–130 billion by 2018.
By 2020, the electronics market in India is expected to increase at a CAGR of 41.4 percent to USD 400 billion from USD 100 billion in 2016.
The total production is expected to reach USD 104 billion leaving a demand-supply gap of USD 300 billion by 2020.
Nearly 70 percent demand of electronic components is fulfilled through imports.
The Indian electronic products industry is expected to grow at a CAGR of 10.1 percent to reach USD 75 billion by 2017 from USD 61.8 billion in 2015.
The Indian semiconductor market is expected to grow from USD 14.5 billion in 2015 to USD 52.6 billion in 2020 at a CAGR of 29.4 percent.
Most of the large electronic components manufacturing companies (Indian or multinational) are located around six cities of the country: Delhi-NCR, Mumbai, Bangalore, Hyderabad, Chennai and Pune.
Delhi-NCR (which includes Noida, Gurgaon, Ghaziabad and Faridabad region) is the largest manufacturing hub, as it hosts a large number of component manufacturers. This is followed by Mumbai and Bangalore.
Demand for electronic products in India is poised for significant growth in the next few years, driven by strong economic outlook. Currently, the electronics demand is largely being met through imports and there is a widening demand-supply gap.
The electronics industry is going through an exciting phase with growth in demand and importance of electronics as well as revolutionary changes in technology, launch of innovative products and the challenge of global competition.
The adoption of high-end technology devices, transitions such as roll out of 4G/LTE networks and the Internet of Things (IoT) are driving accelerated adoption of electronic products.
This is the expected electronics market in India by 2020 in major segments: mobile phones (USD 232 billion), flat panel TVs (USD 34 billion), notebooks, desktops (USD 35 billion), LED (USD 35 billion), consumer electronics (USD 29 billion), set top boxes (USD 10 billion), automotive electronics (USD 10 billion) and medical electronics (USD 8.5 billion).
The market is dominated by electromechanical components (such as PCB and connectors) which form 30 percent of the total demand, followed by passive components (such as resistors and capacitors) at 27 percent. Over the next five years, accelerated local manufacturing of electronics products to cater to growing domestic demand will drive the market for electronics components in India.
Components sourcing and fabrication is an important activity that determines the strength of the country’s native capabilities in manufacturing because components are the building blocks of electronic devices. India has a limited component supplier base with a majority of high value and critical components being imported. Components that are pre-dominantly imported include ICs, PCBs and other active components. These are imported from markets such as China, Japan, Indonesia, Malaysia and Taiwan. The electronic components produced in India include picture tubes, diodes, transistors, power devices, resistors, capacitors, switches, relays, connectors, and magnetic heads, among others.
However, in recent times, active components and associated components have also witnessed significant growth.
Share of imports is higher for specialized and precision components like integrated circuits, chip components, printed circuits boards and light-emitting diodes.
For components that do not require sophistication, India has established near self-reliance. These components include cables, speakers, and cathode ray tubes and so on. India has also been exporting these components to other countries.
The electronic components market can be summarized to:
passive components: capacitors, resistors, wound components, crystals
active components: diodes, transistors, integrated circuits, LED
electromechanical components: PCB, switches, relays, cables, connectors
automotive electronics: increased demand for safety, energy efficiency, connectivity and IoT
industrial electronics: government focus on environmental-friendly, energy-efficient technologies
Government of India
The Government of India has recognized the potential of domestic electronics manufacturing and has taken steps to promote investment in this sector. Programs such as Digital India, Smart Cities etc. will boost the domestic consumption of electronics hardware.
Currently the electronics demand is largely being met through imports and there is a widening demand supply gap. Hence, the Government of India is focusing on establishing a robust ecosystem to boost local manufacturing. The Government of India has treated the electronics sector as a priority under its “Make in India” program. Various state governments have announced ESDM (Electronic System Design & Manufacturing) policies in addition to the incentives offered by the state government.
The Government of India has also taken several steps towards increasing the ease of doing business, which has resulted in increased manufacturing setups by multiple foreign manufacturers in the country. All these efforts are expected to enable India to meet its local electronics demand and also cater to overseas demand in the coming years, by positioning India as a global electronics manufacturing hub. Furthermore, rising wage costs in China have increased India’s attractiveness as an alternate manufacturing destination.
Local brands under the “Make in India” initiative as well as global manufacturers looking to relocate their manufacturing base from China to alternate locations such as India, Vietnam and Indonesia due to mounting labor costs provide a strong impetus to the Indian electronics and hardware industry.
According to Mr. Ravi Shankar Prasad, Union Minister of Electronics & Information Technology, FDI (Foreign Direct Investment) in electronic manufacturing has reached an all-time high of Rs. 123,000 crore (USD 18.34 billion) in 2016 from Rs. 11,000 crore (USD 1.64 billion) in 2014, primarily due to government reforms and “Make in India” initiative.
electronicsB2B.com: www.electronicsb2b.com/eb-specials/industry-report/indian-electronic-components-industry-overview/ (22.Mai 2017)
EY report: “Turning the “Make in India” dream into a reality for the electronics and hardware industry” from April 2016
Ministry of Electronics & Information Technology (MeitY)
IESA (India Electronics Semiconductor Association)–Frost & Sullivan Report
ASSOCHAM (The Associated Chambers of Commerce & Industry of India) – EY (Ernst & Young) Study
India Brand Equity Foundation (A trust established by Department of Commerce, Ministry of Commerce and Industry, Govt. of India)