Demand for electronic products, such as smart TVs and phones, in India is forecast to expand at a compound annual growth rate (CAGR) of 41 percent from 2017-2020 to reach US$400 billion by 2020.
However, to hit such highs, the Government will be required to assist domestic production, according to a joint study by ASSOCHAM and NEC.
Domestic production is currently growing at CAGR of 27 percent and could reach $104 billion, creating a gap for the import of $300 billion-worth of electronic goods, said the report.
Globally, the electronics industry is valued at $1.75 trillion and is considered the fastest growing industry in the world.
In India, the electronics and hardware market grew by 8.6 percent year-on-year to reach $75 billion in 2015, driven by increased demand. India’s growing middle class population and increased amounts of disposable income has led to more consumers requiring connected TVs, smartphones and computers in particular.
The domestic consumption of electronic hardware in 2014-2015 was $63.6 billion. Of this, 58 percent was fulfilled through imported goods. During this period, India produced an estimated $32.46 billion worth of electronics hardware, representing around 1.5 percent of the world’s total production of goods in this sector.
Investments in electronic manufacturing have rocketed in the past few years, with INR110 billion spent in June 2014, compared to INR1278.8 billion last year. Incentives such as the Make in India and Digital India campaigns have helped growth, along with specially focused schemes such as the Modified Special Incentive Package Scheme (M-SIPS) and Electronic Development Fund (EDF).
By Baishakhi Dutta
