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EDA/IP  

Indian electronics industry to log 13-16% CAGR from 2013-18

Posted: 11 Apr 2016     Print Version  Bookmark and Share

Keywords:ASSOCHAM  hardware industry  electronics 

ASSOCHAM-EY has released a report titled 'Turning the Make in India dream into a reality for electronics and hardware industry' that says the Indian electronics and hardware industry is expected to grow at a CAGR of 13-16 per cent during 2013-18 to reach about ₹7.46 to ₹8.66 lakh crore ($112 to 130 billion) by 2018 from current level of nearly ₹5 lakh crore ($75 billion). The growth is expected on the back of rising consumer demand, growing disposable incomes, declining prices of electronics, and numerous government initiatives such as wider broadband connectivity, e-governance programmes and others, the study indicated.

The study also highlights the key demand-side and supply-side challenges faced by companies in this sector and presents some of the policy recommendations to strengthen electronics manufacturing in the country. Growing reliance on imports for electronic components and rapidly increasing demand for electronic products makes it crucial to enhance/strengthen India's electronics manufacturing capabilities. Roughly 50-60 per cent of the demand for electronic products and the demand for nearly 70-80 per cent of the electronic components market is fulfilled through imports.

According to Milan Sheth, partner and leader, ASSOCHAM-EY, "The Make in India initiative, combined with global manufacturers looking to relocate their manufacturing base from China to alternate locations such as India, Vietnam and Indonesia due to mounting labour costs provides a strong impetus to the Indian electronics and hardware industry. It presents an opportunity to become a manufacturing-led sector in India from being predominantly consumption-driven."

That said, there exist certain challenges around ease of doing business, taxation-related issues, and lack of end-to-end manufacturing value chain including component ecosystem, skilled labour unavailability and infrastructure bottlenecks in the country. Although the Government has undertaken steps to promote India as a manufacturing hub in the last two budgets, certain areas are yet to be addressed.

With the electronics sector expected to grow rapidly in the coming years, avenues will open for manufacturers to invest in the Indian market. Companies are looking at increasing their manufacturing base in India to serve domestic markets and also the Middle East, Africa and SAARC countries. However, to ensure that this momentum keeps pace, the industry and the government need to work together, to make the Indian electronics industry highly competitive, the report added.





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