electronic equipment industry india
TRANSCRIPT
-
7/29/2019 Electronic equipment industry india
1/38
The electronic equipmentindustry in India
-
7/29/2019 Electronic equipment industry india
2/38
-
7/29/2019 Electronic equipment industry india
3/38
ForewordIndia has been one o the worlds astest growing economies during the last ew
years. However, India has still not recovered rom the eects o the ormer inward-
oriented policies it ollowed until the 1990s. Economic reorms started taking place
in the beginning o the 1990s when India started opening up gradually. The ques-
tion is whether India can implement the required policy changes eectively and de-
velop a conducive business climate or industry to grow, and thus be able to sustain
the strong rate o growth it has achieved over the past ew years.
During this time there has been increasing condence in the manuacturing sector in
India and its long term potential as a manuacturing hub. Importance o the engine-
ering industry is supreme in this regard and it also plays a crucial role in the economic
growth o the country. To understand the driving orces o India better, it is essential
to develop an understanding o prevailing undamentals in the engineering industry.
In this report we provide an overview o the engineering industry in India with
relevant acts regarding the structure and size, growth rates, main challenges, trends
in international trade, research and development initiatives, as well as an indication
o uture outlook o the main segments in the engineering industry. It is a series o
seven dierent reports that includes an overview o the engineering industry, the
automotive industry, the machinery and equipment industry, the electrical machi-
nery industry, the automotive components industry, the electronic equipment indu-
stry and the abricated metal products industry.
This series o seven dierent reports has been commissioned by Teknikretagen,
the Association o Swedish Engineering Industries, to provide a detailed overview
o the Indian engineering industry covering various aspects o the main segments.
It is hoped that the reports will help identiy areas o business interest or Swedish
engineering companies and give the reader increased knowledge o the present
industrial development in India.
The reports have been authored by Mr. Rahul Sanyal. He is an economist rom New
Delhi in India, and has been appointed by Teknikretagen to prepare these seven reports.
Stockholm, September 2008
Anders Rune
Chie Economist
-
7/29/2019 Electronic equipment industry india
4/38
-
7/29/2019 Electronic equipment industry india
5/38
Table o contents
Overview of the electronic equipment industry in India .................................................... 5A snapshot o the Indian electronic equipment industry .............................. ...................... 5Evolution o the Indian electronic equipment industry ...................................................... 6Large manuacturers o electronic equipment in India ............................ ........................... 7Contribution o the electronic equipment industry to the economy.................................. 9Growth o the electronic equipment industry ................................ ................................. ... 10Pattern o development ............................. .................................. ................................ ......... 15Large untapped potential is driving growth ............................. ................................. ......... 17
Size and structure of the electronic equipment industry ................................................ 17Consumer electronics ................................ ................................. ................................ ......... 18Computers ............................ ................................. ................................ ............................... 20Communication and broadcasting ................................. ................................ .................... 21Electronic components .............................. ................................. ................................. ........ 23Industrial electronics ............................ ................................. ................................. .............. 24Strategic electronics......................................... ................................. ................................. ... 25
International trade scenario............................. ................................. ................................. ... 26Exports ............................ ................................. ................................. ................................. ... 26Imports ................................. ................................ ................................. ............................... 28
Research and development ............................. ................................. ................................. ... 29
Future outlook .............................. ................................. ................................. ......................... 30
References ............................... ................................ ................................. ............................... 33
-
7/29/2019 Electronic equipment industry india
6/38
4
The Indian electronic equipment industry is one o
the astest growing segments o the Indian industry,but it is still very much in a developmental stage. The
electronic equipment industry is completely delicen-
sed with the exception o aerospace and deence elec-tronics. With liberalization o oreign investment and
trade policies, this industry is attracting considerableinterest rom multinational manuacturers, not only
as a vast market but also as a potential productionbase or other markets.
-
7/29/2019 Electronic equipment industry india
7/38
5
The electronic equipmentindustry in India
Overview of the electronic equipment industry in India
India has a relatively small electronic equipment industry. In contrast to many
newly industrialized countries, the Indian electronic equipment industry derives
most o its revenues rom the domestic market. Historically, the Indian electronic
equipment industry has grown under protection rom oreign competition through
high duties. Liberalization o the industry has beneted the consumers but weake-
ned the local manuacturing industry as it is unable to compete with the oreign
manuacturing companies.
A snapshot of the Indian electronic equipment industryThe Indian electronic equipment industry constituted less than 1 per cent o the
global electronic equipment industry in 20062007, which is miniscule in compa-
rison to the contribution o other Asian countries such as China, South Korea and
Taiwan to the electronic equipment industry. Currently, approximately 50 per cent
o the demand or electronic equipment is being ullled by imports. However, it isbelieved that India has a large untapped potential or exports growth.1
Production o electronic equipment is gradually shiting to Low Cost Countries
(LCCs) like India that also serve as large markets or multinational manuacturers.
Demand in the Indian market is growing rapidly and investments are fowing in to
increase manuacturing capacity. Technological advancement in recent years has
also increased with the boom in the Inormation Technology (IT) industry in India,
thereby improving the international competitiveness o the industry and helpingIndia develop into a hub or manuacturing electronic equipment.2 Development
1) This inormation has been obtained rom The Hindu Business Line (9th November 2006) and ELCINA Electronic
Industries Association o India (2006)
2) ELCINA Electronic Industries Association o India (2006) has been reerred
-
7/29/2019 Electronic equipment industry india
8/38
6
in the electronic equipment industry in recent years has also had a proound eect
on other industries and sectors that use electronic equipment, by enabling them tochange their cost structures and increase productivity.3
Evolution of the Indian electronic equipment industryThe electronic equipment industry in India came into existence in true earnest only
in the 1960s, with an orientation towards deence and space technologies, which
o course was strongly controlled by the Government o India (GOI). Then there
ollowed developments in consumer electronics mainly in transistor radios, black &
white television sets and other audio equipment over the next two decades.
The landscape o the electronic equipment industry changed signicantly only in
the 1980s. In act the period between 1982 and 1990 is considered the golden period
or electronic equipment. The GOI allowed import o colour television sets only
rom 1982 onwards due to the Asian Games being held in India at the time. In the
late 1980s, India also began to see introduction o computers and telephones.
Major scal reorms took place in the year 19911992, but the positive impact othe same was diluted to some extent, due to the Gul War. However, aterwards
during the mid and late 1990s, when the Indian electronic equipment industry
started booming, the electronic equipment industry resumed its high priority, albeit
to a limited extent.
Beginning in the late 1990s and into the 21st century, India signed a pact with
the World Trade Organisation (WTO) or reducing customs duty on electronic
equipment to zero. Ater this agreement, the Indian electronic equipment industrybecame vulnerable to international competition and could not keep up. As a result,
several manuacturing units turned sick and had to be closed down.4
Other Asian economies with similar characteristics as India have become signi-
cant players in the world through success in this industry and have also succeeded
in creating large scale employment directly and indirectly. Given the right impetus,
the electronic equipment industry can also add signicant economic value in India.
With global trends in the electronic equipment industry being optimistic, India isnow poised to evolve into a major electronic equipment manuacturing hub.
3) Reerence has been made to Ministry o Inormation and Communication Technology (2008a)
4) This inormation has been obtained rom ELCINA Electronic Industries Association o India (30th March 2008)
-
7/29/2019 Electronic equipment industry india
9/38
7
Large manufacturers of electronic equipment in India
Several multinationals with operations in India are rming up their plans to makeIndia a manuacturing hub or their global operations. Backed by large investments,
the companies are increasingly getting attracted to the advantages India oers in
terms o availability o skilled manpower and signicant cost reduction in logistics
and raw materials. The continued growth in the domestic market has enabled a
number o companies in achieving economies o scale in production.
The industry produces a wide range o electronic equipment and can be broadly
divided into the ollowing industry segments:
Consumerelectronics;
Industrialelectronics;
Communicationandbroadcastingequipment;
Computers;
Strategicelectronicsand
Electroniccomponents
Most o the large manuacturers are present in two segments i.e. consumer electro-
nics and communication and broadcasting. The consumer electronics segment is
the largest segment in the industry in size and the largest number o manuacturers
in the industry is present in this segment. Foreign manuacturers such as Sony, LG
Electronics, Nokia and Samsung have established large manuacturing acilities and
now enjoy a signicant share in the growing market or products like television sets,
mobile phones, DVD players and audio equipment etc. Growth in the industry has
also attracted contract manuacturers like Solectron Centrum, Flextronics, JabilCircuit and Elcoteq Network that are making large investments in India.
The Indian market has substantial scope or penetration o electronic equipment.
The communication and broadcasting equipment segment is one o the largest
segments in the industry and is also expected to attract a large number o manuac-
turers in the segment. Strategic electronics does not orm a signicant part o the
industry in terms o turnover. However, this segment is expected to develop in both
technical and industrial terms. Since the opening up o this segment to private players,
a number o large manuacturers rom the private sector are entering this segment.
India is a net importer o electronic equipment. However there is signicant untap-
ped potential in the industry and both domestic and oreign manuacturers are not
-
7/29/2019 Electronic equipment industry india
10/38
8
only producing or the domestic market but they are also using their acilities in
India to manuacture or exporting to other countries.
The table below mentions some o the largest manuacturers in the electronic
equipment industry across dierent segments.
LARGE MANUFACTURERS WITHIN THE INDIAN ELECTRONIC EQUIPMENT INDUSTRY
Company descriptions and products manuactured by them have been mentioned. The list is not
exhaustive and is only indicative o some o the domestic and oreign manuacturers in the industry.
Manufacturer Company description Sectors/ Products
Philips India Has operations in India since 1930 and has a large Televisions, home theatre
market presence. It is an industry leader and is well systems, recorders, portable,
known in the consumer & liestyle product segments mobile phones etc
Sony India Started operations in 1994 and it is one o Indias Computers, cameras, audio
oremost brands. It is considered a benchmark or & video equipment, television
superior quality, advanced technology and service sets and in-car entertainment
LG Electronics Was established in 1997, is a market leader and Washing machines, mobile
enjoys a premium brand positioning. It is known or phones, television sets, audiohaving the most eco-riendly manuacturing plants equipment & air-conditioners
Samsung India Started operations in 1995. India is the hub or Mobile phones, camcorders,
Samsung in Sri Lanka, Nepal, Maldives, Bangladesh television sets, audio & video
and or exports to Commonwealth, SAARC countries equipment, home appliances
Videocon Is an Indian company that started operations in Television sets, DVD players,
1987. It is a household name and now has microwave ovens, washing
collaborations with world leaders like Electrolux machines, rerigerators etc
MIRC Electronics A company o Indian origin that was established in Television sets, audio & video
1981. Sells its products under the name o Onida. It equipment, washing machines
has a substantial share in the television sets market and microwave ovens
Nokia The frst mobile call in India was made rom a Nokia Has 3 main operations
mobile phone in 1995. Nokia has played a pioneering mobile phones, multimedia
role in the growth o cellular technology in India and enterprise solutions
Flextronics It is one o the oremost in the electronic equipment Equipment manuacturing and
contract manuacturing business in India. Alcatel and device manuacturing or wire-
Nokia are some o its biggest existing customers less mobile devices
IBM IBM started in India in 1951, let in 1978 and Personal computers, laptops,re-entered in 1992. It is a pioneer in the notebook computer accessories, storage
market and is highly reputed. It is also known or systems etc
conducting extensive R&D in its acilities in India
Source: Industry research and analysis.
-
7/29/2019 Electronic equipment industry india
11/38
9
Contribution of the electronic equipment industry to the economy
The Indian electronic equipment industry has seen relatively stable annual growthrates in recent years at approximately 15 per cent. The consumer electronics seg-
ment has consistently remained the largest contributor to turnover in the industry.
In the year 20062007, the share o the consumer electronics segment in industry
turnover was more than 30 per cent.5
The contribution o the electronic equipment industry to the GDP o the economy
was approximately 1.90 per cent in the year 20062007.6 This is in sharp contrast to
other Asian countries like South Korea, Taiwan, and China that contributed 15.1 percent, 15.5 per cent and 9.6 per cent to their respective GDPs in 20062007.7
There is concern about the drivers or inducing growth in this industry. Countries
like Taiwan, Korea, Malaysia and o late China, have recorded much higher growth
in the electronic equipment industry and are exporting worldwide. Presently these
4 countries account or 20 per cent o the global electronic equipment production.
This is also enabling these countries to create wealth, improve eciency, generate
additional employment and develop better communication inrastructure.8
India, in comparison has not been able to take much needed steps to be able to en-
joy the same upward trend like these countries. As mentioned earlier, this is largely
because India has still not recovered rom the eects o the inward-oriented policies
that were ollowed rom 1947 to 1991. When India agreed with the WTO to remove
duty protection, several domestic manuacturing units closed down as they were
inecient and were not able to match the new oreign competition.
In the 1990s, the size o the domestic market was also much smaller than it is today.But now India has the potential to develop and manuacture electronic equipment
or the global market and gain in global share besides meeting the countrys uture
requirement in the areas o inormation, communication and entertainment.
5) Reerence has been made to Ministry o Communications and Inormation Technology (2008b)
6) This has been compiled based on deductive analysis. The turnover and share o the sotware industry (also a part
o the electronic equipment industry in India) in GDP was obtained rom Ministry o Communications and Inorma-
tion Technology. Henceorth, the turnover o the electronic equipment industry was used to obtain the contribution
o the electronic equipment industry to GDP. Reer Ministry o Communications and Inormation Technology (2008b)
7) Reerence has been made to The Hindu Business Line (11th February 2008)
8) Reerence has been made to Ministry o Communications and Inormation Technology (2008a)
-
7/29/2019 Electronic equipment industry india
12/38
10
Growth of the electronic equipment industry
It is widely believed that growth o the electronic equipment industry in India hasnot been consistent with the market potential. Distinct growth rates in the industry
have started only since 2000 beginning with the Inormation Technology (IT) boom.
The computers segment recorded the highest growth rate in the industry growing by
more than 88 per cent between the year 20032004 and 20062007, ollowed by the
communication and broadcasting segment which grew by approximately 77.5 per
cent during the same period. However these ast growing segments grew over a small
base. The largest segment by size, the consumer electronics segment has also demon-
strated steady growth rates o approximately 10 per cent during this period.9
With rising income levels, the demand or consumer electronics is set to expand
enormously. According to the Global Competitiveness Report, India is ranked 62
out o 131 countries in terms o technological readiness. According to the report,
Indias rankings in terms o computers, telephones, mobile connectivity among
other things are very low. However, with rising incomes and increasing urbaniza-
tion, demand or electronic equipment across segments is set to increase. This will
positively impact demand or electronic equipment across segments.10
The gure shown herewith depicts the Compounded Annual Growth Rate (CAGR)
o dierent segments in the electronic equipment industry between 2000 and 2007.
GROWTH OF SEGMENTS WITHIN THE ELECTRONIC EQUIPMENT INDUSTRY
The fgure below depicts CAGR o segments within the electronic equipment industry rom the year 2000
till 2007.11
Source: Indian Brand Equity Foundation
9) Reerence has been made to Ministry o Communications and Inormation Technology (2008b)
10) Reerence has been made to World Economic Forum (2008)
11) Reerence has been made to Indian Brand Equity Foundation (2007)
Consumerelectronics
18
Segment
Industrialelectronics
5
Computers
20
Communicationand broadcasting
11
Strategicelectronics
8
Electroniccomponents
15
-
7/29/2019 Electronic equipment industry india
13/38
11
Identifcation o the electronic equipment industry as one o the ocus areas
The Ministry o Commerce and Industry in India has emphasised the importanceo electronic equipment manuacturing as one o the ocus areas or the manuac-
turing sector and indicated that the Government o India (GOI) is prepared to take
scal measures and provide incentives or growth and development o the electro-
nic equipment industry. The main objectives highlighted are to:
Maketheindustrygloballycompetitive;
Reducetheexcessivedependenceonimportsasisthecasecurrently;
AttractmoreForeignDirectInvestment(FDI)intheindustry; Reducethecostofproduction;
Increasevolumestobeabletorealizeeconomiesofscale;
Takemeasurestogenerateanincreaseindemand;
Compensatefordisabilitiesuntilbasicinfrastructuralconstraintsareremoved;
Movetowardslowerindirecttaxationlevelsinthenext35years.Forexample,
Chinas indirect taxation levels are considerably lower than those in India.12
Despite the late start and modest position that India has currently, it is time orIndia to capitalize on the advantages it has in the manuacturing sector. In addition
to the low cost o labour, these advantages include highly-developed engineering
capabilities, presence o high-quality suppliers and relevant technology partners
with established relationships that are mutually benecial and sustainable. On the
other hand, industry sources believe that though the suppliers are o good quality,
the network o suppliers is clearly inadequate to be able to service the large scale
expansion and demand in the industry. Many eel that the process ollowed in the
development o the automotive components industry needs to be replicated in theelectronic equipment industry to be able to achieve growth targets.
Increase in incomes and aordability
About 25 per cent o the Indian population lives below the poverty line, but a large
and growing middle class o 350 million has disposable income or consumer
electronic equipment. It is strongly expected that the consumer durables market
will have strong growth in the coming years as the prole o the Indian consumer is
changing.13 There are a large number o nuclear amilies (changing rom the joint
amily system prevalent in India), higher disposable income levels and easier access
to credit with the growth o the banking and credit sector. Replacement cycles have
12) Reerence has been made to Ministry o Communications and Inormation Technology (2008a)
13) This inormation has been obtained rom ELCINA Electronic Industries Association o India (2nd July 2008)
-
7/29/2019 Electronic equipment industry india
14/38
12
also increased along with a rise in the aspiration levels o the growing number o
young working proessionals. So, where the higher strata is going in or premiumitems such as LCD televisions and our-door rerigerators, the middle and lower
classes, with rising levels o aspiration and incomes, are going or multiple owner-
ship o durables and electronic items like washing machines, television sets and
rerigerators.
Low penetration levels
A key actor in growth is the low density o electronics in India. By global standards
Indias computer and telecom penetration are quite low. The gure below shows the
penetration levels o computers, telephones and television sets in India. Increase
in demand or telecom products has been outstanding with India adding approx-
imately 8 million phone users each month.14 However, India ranked 114 out o 131
countries as per the Global Competitiveness Report, in terms o mobile telephone
subscribers.15 These gures demonstrate the large untapped potential that exists in
the industry in India.
PENETRATION LEVELS IN ELECTRONIC EQUIPMENT
The fgure displays penetration level or the year 2005 and the expected level in 2010
Source: Investment Commission o India16
14) This fgure has been obtained rom the book The Elephant and the Dragon. See Meredith R (2007)
15) Reerence has been made to World Economic Forum (2008)
16) Reerence has been made to Investment Commission o India (2006)
Television sets
2005
2010 expected
175
130
Telephones
214
100
Personal computers
70
14
-
7/29/2019 Electronic equipment industry india
15/38
13
The increasing growth is not only dependent on urban demand but also on semi-
urban and rural demand. Rural India accounts or nearly 70 per cent o the totalnumber o households but the penetration o rerigerators is less than two per cent
and that o washing machines is just 0.5 per cent. This oers huge scope or tap-
ping the potential in the industry. Mr Sunil Mehta, Joint Vice-President, Videocon
Industries, adds, Penetration o consumer durables is still very low and this market
is the one that almost all players are targeting.17
Increase in investments
Large scale investments have started pouring into India. Samsung India has linedup a USD 500 million investment or a new LCD manuacturing unit in the Sri-
perumbudur Special Economic Zone (SEZ) near Chennai. Air-conditioning and
rerigeration major Carrier Corporation said it would invest Rs 2 000 million in
India during the next three years to build a new global Research & Development
(R&D) centre, develop industry-leading products and technology or local markets
and signicantly enhance the companys manuacturing operations here. Air-
conditioning major Fedders Lloyd Corporation Ltd and Victor Company o Japan
(JVC) would be jointly investing USD 30 million to create space or JVC products in
the Indian consumer electronics market as well. Other international players such as
Siemens, Texas Instruments, Matsushita, LG, Alcatel, Samsung, Sharp and Lenovo
have already setup their manuacturing operations in India.18
Government buying rom domestic production to spur demand
Government buying is known to be one o the most signicant catalysts to trigger
domestic consumption. To enable manuacturers to increase production volumes,the Government o India (GOI) has decided that procurement o electronic equip-
ment or the GOI should only consist o locally manuactured products against im-
ported goods. The GOI is one o the largest administrations in the world and thus
this decision makes a signicant dierence to scale o demand and thus is perceived
to be a big demand driver.19
17) Reerence has been made to The Hindu Business Line (1st January 2008). Videocon Industries is one o the
largest manuacturers o electronic equipment in India.
18) The inormation has been obtained rom The Hindu Business Line (2nd January 2008) and The Hindu Business
Line (29th November 2007)
19) Reerence has been made to Ministry o Communications and Inormation Technology (2008a)
-
7/29/2019 Electronic equipment industry india
16/38
14
Electronic manuacturing services
Continuing cost pressures have led to the outsourcing o more and more elementso manuacturing design to Contract Equipment Manuacturers (CEMs). CEMs
are companies that are hired by Original Equipment Manuacturers (OEMs) to
produce products on contract basis where the OEMs own the designs and Intel-
lectual Property Rights (IPR). The reasons why OEMs are outsourcing are the onus
o fexibility in production is transerred to the CEM, manuacturing costs can be
reduced and they can ocus on product development.
Some o the worlds largest CEMs, namely Flextronics, Jabil Circuit, Elcoteq Net-work and Solectron Centrum have presence in India. Some o the Indian CEMs are
TVS Electronics, D-Link, Celetronix and Tata InoTech.20 The Investment Commis-
sion o India estimates that out o the USD 500 billion global Electronics Manu-
acturing Services industry, India is in a position to tap USD 11 billion in contract
manuacturing and USD 7 billion in design services by the year 2010.21
Housing boom
India is going through a housing boom. With opening up o the banking sectorthere is easier access to credit, a rise in the income level and an increasing number
o people purchasing houses. This also leads to increased purchases o electronic
equipment.Whenpeoplemoveintonewhouses,theybuyelectronicequipment;
and with increasing incomes they tend to graduate to high-end products, which is a
major reason or growth in the industry.
Multiple increases in demand or consumer electronics during estivalsIndia is a very religious country with several estivals. For many estivals the tra-
dition is to buy new electronic equipment or the house among other things. The
most important estival is Diwali during which time several people across classes
buy electronic equipment. This time o the year witnesses the maximum number o
sales in consumer electronics in a short span o time. For instance, only midway th-
rough the Diwali estival season, LG Electronics India recorded 51 per cent growth
in terms o value and 34 per cent in terms o volume in 2007. At that rate more than
25 per cent o the sales or the company or the year were made in just one month.22
20) Reerence has been made to Indian Brand Equity Foundation (2007)
21) Reerence has been made to Investment Commission o India (2006)
22) Reerence has been made to The Hindu Business Line (29th November 2007)
-
7/29/2019 Electronic equipment industry india
17/38
15
Pattern of development
Senior industry experts believe that growth in the industry cannot be achieved inisolation but through clusters connected through vertical and horizontal linkages.
To urther enhance Indias electronic equipment exports to global markets, develop-
ment o clusters or producing electronic equipment has begun to boost production
and drive exports. These clusters are being designed to do away with bureaucratic
hurdles, provide world class inrastructure in terms o fexible labour laws, uninter-
rupted supply o power, rail, road and sea linkages, telecom inrastructure, income
tax benets etc.
This concept is working. For instance, two electronic equipment SEZs in the state o
Tamilnadu in South India are completely sold out. Companies like Samsung, Nokia
and Flextronics are manuacturing rom the Sriperumbudur SEZ near Chennai,
Tamilnadu (one o the two SEZs). Mr. Gulu Mirchandani, Chairman and Managing
Director o MIRC Electronics, one o the largest electronic equipment manuactu-
rers said that he is also looking at investing in the state.23
Eleven major clusters have been identied. These account or almost 95 per cent oelectronics, sotware and services exports. The major clusters where manuacturers
are present and where SEZs are being developed are in the states o Punjab in North
India, Maharashtra in West India and Karnataka and Tamilnadu in South India.
Some other large manuacturers are present in some other states, such as Ericsson
that has a manuacturing acility in Jaipur in the state o Rajasthan located in North
West India, Philips India is present in the state o West Bengal in East India and
Sony India has a large manuacturing acility in the state o Haryana in North India.
23) The inormation has been obtained rom The Hindu Business Line (28th July 2007)
-
7/29/2019 Electronic equipment industry india
18/38
16
CLUSTERS WHERE MANUFACTURING IS TAKING PLACE AND SEZs ARE DEVELOPING
The fgure displays the states where large clusters are developing.
SonyIndia
Alcatel
GodrejIndustries
JabilCircuit
MIRCElectronics
Celetronix
DLinkLGIndia
Elcoteq
Videocon
Alcatel-Lucent
SolectronCentrum
IBMFlextronics
Nokia
TVSElectronics
Samsung
Source: Industry analysis and research. Company websites have been used to obtain details o manuacturing acilities
in the states shown above
Punjab
Maharashtra Karnataka
Tamilnadu
-
7/29/2019 Electronic equipment industry india
19/38
17
Large untapped potential is driving growth
Indias electronic equipment industry presents great opportunities or growth. Con-sumer electronics, electronic components and computers are attractive segments
as they oer both size and potential. Contract manuacturing is picking up at a ast
pace and can also be used in a big way or increasing exports. Success in the Indian
market would require attaining the appropriate technology at low cost, good under-
standing o local markets and product customisation to suit local needs.
In terms o location, Tamilnadu is the most attractive state currently. A large num-
ber o manuacturers are already present in the state. It has the requisite linkagesand better inrastructure overall compared to many other states. In act it has
already developed into a hub or the automotive industry also. Some o the other
attractive states are Andhra Pradesh and Punjab.
Size and structure of the electronic equipment industry
Despite having a country o a large geographical area and a population in excess o
1.2 billion people, the size o the electronic equipment industry is quite small which
contributed only 1.9 per cent to the GDP o the economy in the year 20062007.
TURNOVER OF SEGMENTS IN THE ELECTRONIC EQUIPMENT INDUSTRY
The table below depicts fgures between 20032004 and 20062007. Values are in Rs. Billion and
growth rate is in percentage
Segment/Year 20032004 20042005 20052006 20062007
Consumer electronics 152.0 168.0 180.0 200.0
Industrial electronics 61.0 83.0 88.0 104.0
Computers 68.0 88.0 108.0 128.0
Communication and
broadcasting equipment 53.5 48.0 70.0 95.0
Strategic electronics 27.5 30.0 32.0 45.0
Electronic components 76.0 88.0 88.0 88.0
Total annual turnover 438.0 505.0 566.0 660.0
Industry growth rate 16.80 15.30 12.07 16.60
Source: Ministry o Communications and Inormation Technology
-
7/29/2019 Electronic equipment industry india
20/38
18
The consumer electronics segment dominates the industry with a market share o
over 30 per cent in the year 20062007. The next largest segment in terms o turno-
ver in the industry is the computers segment with a share o 19.40 per cent in the
industry. The gure herewith shows a graphic representation o the share o each
segment in the electronic equipment industry.
SHARE OF EACH SEGMENT IN THE ELECTRONIC EQUIPMENT INDUSTRY
The fgure displays the share o each segment in turnover or the year 20062007.
Share is in percentage.
Source: Ministry o Communications and Inormation Technology
Consumer electronicsConsumer electronics is the largest segment in the industry with a turnover o Rs.
200 billion in the year 20062007. During the year 20072008, the consumer elec-
tronics segment produced worth an estimated Rs. 225 billion recording a growth o
12.5 per cent.24
Trends analysis by Federation o Indian Chambers o Commerce and Industry
According to a survey on the electronic equipment industry in India, conducted by
the Federation o Indian Chambers o Commerce and Industry (FICCI),25 growthin this segment has been achieved despite an unriendly customs duty structure and
30.30
Segment
15.75
19.40
14.40
6.82
13.33
Consumerelectronics
Industrialelectronics
Computers Communicationand broadcasting
Strategicelectronics
Electroniccomponents
24) Reerence has been made to Ministry o Communications and Inormation Technology (2008b)
25) FICCI is considered one o the largest think tanks or the industry and has several engineering companies as its
members
-
7/29/2019 Electronic equipment industry india
21/38
19
high levels o excise duties. The survey also points out that the uture o this sector
is optimistic as technological advancements, alling prices due to increased compe-
tition, and declining import taris will help in growth o the segment.26 It is expec-
ted that the market or white goods will increase at a ast pace in uture.
Low penetration levels
A senior ocial o Whirlpool India has pointed out that the categories that are
growing very rapidly are the ones that are less penetrated. There is a clear trend o
the technologically advanced high-end products growing at a signicantly aster
rate than the average. For instance, the ully automatic washing machines, rost-reererigerators, split air-conditioners and microwaves have been growing at a very ast
rate as the penetration levels are relatively low in these product segments.27
Scenario in some product categories
The television set product segment is the largest contributor to the consumer elec-
tronics segments revenues. The high end products, particularly the Liquid Crystal
Display (LCD) television sets segment has been registering growth o more than100 per cent over the previous ew years, albeit on a very small base. Production o
LCD television sets is expected to reach 10 million units by 20102011. The DVD
player market has also been increasing at an annual average rate o 20 per cent and
production o these players is expected to cross 7 million units in 20082009. With
the advent o the Direct To Home (DTH) and Conditional Access System (CAS) in
many parts o India, the demand or Set Top Boxes (STBs) has been increasing at an
exponential rate. Only 25 per cent o demand is met by domestic production.28
Advent o organized retail enabling growth o the sector
India has also been going through a revolution in the retail market. Over the past
ew years, the Indian retail market has been getting organized. In India, the concept
o large shopping malls and supermarkets was limited to the reach o a very small
part o the population. Now with the opening up o several shopping malls in seve-
ral cities across India, the reach o consumer electronics has increased. With increa-
sing incomes and urbanization there is increased demand or consumer electronicsin the country.
26) The inormation has been obtained rom The Hindu Business Line (26th December 2007)
27) Reerence has been made to The Hindu Business Line (29th November 2007)
28) Reerence has been made to Ministry o Communications and Inormation Technology (2008b)
-
7/29/2019 Electronic equipment industry india
22/38
20
Boom in the luxury car market driving growth o the industry
With the growth o the luxury car market in the automotive industry there hasbeen a parallel increase in demand or hi-tech gizmos. The car accessories market
is evolving with an increasing number o sophisticated devices being tted in them
making cars not just vehicles but communication and entertainment zones. These
gizmos include television sets, DVD-players, advanced audio players, entertainment
consoles etc. The GPS systems are also new to the Indian car market and with an
increasingnumberofluxurycarscomingintothemarket;thedemandforGPS
systems is also going up signicantly owing to the large domestic market.
ComputersThe Personal Computers (PC) segment includes both desktop computers as well
as notebook laptops. In the year 20062007, this segment had a turnover o Rs.
128 billion registering a growth rate o 18.5 per cent. It is estimated that the turno-
ver o this segment will increase to Rs 164 billion in the year 20072008 registering
a growth rate o 28.1 per cent. The growth o the segment was led by a signicant
surge in growth o notebook sales o 59 per cent, while sales o desktops grew by
only 3 per cent in 20062007. PC sales are projected to increase substantially, given
the strong macroeconomic conditions and positive buying sentiment in the market,
and increased demand rom various industries or both notebooks and desktop
computers. High growth in PC sales can be attributed to increased consumption by
industries such as Telecom, Banking & Financial Services, Manuacturing, Educa-
tion, Retail and Business Process Outsourcing (BPO)/ IT Enabled Services (ITeS) as
well as major e-governance initiatives taken by the Central and State Governments.
Governments are signicantly large in India. In act India has one o the largestbureaucracies in the world.
Another major driver o growth in this segment in the industry is the downward
trend in prices. Each year the prices or computers all, enabling a larger population
to aord the gadgets, leading to robust growth through increased demand rom the
households sector. According to the Global Competitiveness Report, India ranked
105 out o 131 countries in terms o the personal computers market. An increasing
number o Small and Medium Enterprises (SMEs) are also generating demand orcomputers. The major manuacturers in this segment include global majors like
Lenovo, Dell, Hewlett Packard, Compaq, Apple, Acer, Toshiba, Sony etc.29
29) Reerence has been made to Ministry o Communications and Inormation Technology (2008b)
-
7/29/2019 Electronic equipment industry india
23/38
21
Communication and broadcasting
This segment is the astest growing segment o the electronic equipment industry.Communication technology has been recognized nationally as a crucial driver or
growth o the electronic equipment industry. Overall teledensity is low in India,
but despite that, due to the large size o the domestic market, it is already one o the
largest in the world in terms o number o telephone subscribers. India also enjoys
the position o being one o the largest mobile phone markets. Many o the worlds
renowned manuacturers are present in India and others are also setting up acilities
in India to meet local demands and to serve oreign markets also.
The table below shows that although this segment is developing ast, there is signi-
cant untapped potential or this segment to grow. The segment has the potential
to match the size o the largest segment in the industry i.e. the consumer electronics
segment.
TURNOVER AND GROWTH RATE OF COMMUNICATION AND BROADCASTING SEGMENT
Data is or the years 20042005 till 20072008. Values are in Rs. Billion and the growth rate is in
percentage
Segment / Year 20042005 20052006 20062007 20072008*
Communication and
broadcasting equipment 48.0 70.0 95.0 143.5
Segment growth rate - 45.83 35.70 51.05
Source: Ministry o Communications and Inormation Technology
*) These fgures have been estimated by Ministry o Communications and Inormation Technology
The table below shows rankings compiled by the Global Competitiveness Report
that show that India is very backward when it comes to technological readiness.
Large scale development is required in the industry to provide the requisite in-
rastructure in the segment to enable it to grow, and to tap the potential o the large
and burgeoning domestic market.30
30) Reerence has been made to World Economic Forum (2008)
-
7/29/2019 Electronic equipment industry india
24/38
22
RANKINGS OF INDIA IN THE GCR IN TERMS OF TECHNOLOGICAL READINESS
The table below shows the rankings or the year 20072008 out o 131 countries
Segment description Ranking
Mobile telephone subscribers 114
Number o internet users 95
Broadband internet subscribers 88
Source: Global Competitiveness Report 20072008
Telephone and broadband subscriber base scenario
India had set a target to have 250 million telephone subscribers and 10 million
broadband subscribers by the year 2007.31 The gross number o telephone subscri-
bers reached 272.88 million as o December 2007 with mobile telephone subscribers
being 233.63 million. In comparison, USA and China had 260.5 million and 550.5
million subscribers respectively or mobile phone services in 2006 as per a study
released by the Telecom Regulatory Authority o India (TRAI).32
The overall tele-density reached the level o 23.89 per cent in December 2007, which
is a considerable improvement rom a tele-density o 17.16 per cent in December
2006. Now, India is one o the largest in the world in terms o gross telephone sub-
scribers and second in Asia ater China. At the end o December 2007, the number
o broadband connections was 3.13 million. The short term target is 10 million by
the end o 2010 and the long term target is to reach 20 million by the end o 2020.33
Fast paced growth o the mobile telephony market
India is one o the leaders in the mobile handset market. With increasing penetra-
tion o the market, increase in incomes and connectivity, and conducive conditions
or engineering and manuacture o handsets, this segment has been booming at the
rate o 85 per cent per year as per a study conducted by TRAI. However, in compa-
rison to China, India is still ar behind. According to the study, the subscriber base
o India in cellular lines in March 2006 was 93.04 million compared to 410 million
in China.34
31) Reerence has been made to ESC: Electronics and Computer Sotware, Export Promotion Council (30th March 2008)
32) Reerence has been made to Embassy o India (April 2008). Reerence has also been made to Ministry o Com-
munications and Inormation Technology (2008a)
33) Reerence has been made to ESC: Electronics and Computer Sotware, Export Promotion Council (30th March 2008)
34) Reerence has been made to Telecom Regulatory Authority o India (2006)
-
7/29/2019 Electronic equipment industry india
25/38
23
The largest manuacturers o mobile handsets rom around the world are manu-
acturing in India. These include Nokia, Sony-Ericsson, Motorola, Alcatel-Lucent,
Samsung, and LG. Several manuacturing acilities are expected to come up in the
coming years, to meet local demands as well as make India a manuacturing hub or
their international markets.
Some o the achievements made by India and actors or growth in the segment are:
Indiahasthedistinctionofhavingtheworldslowestcallratesi.e.23cents
Recordsalesof8millionphonesamonth
ProductionoftheworldscheapesthandsetatUSD17.2
These actors are demonstrative o the act that the mobile telephone market in In-
dia is booming and is set to achieve the ambitious targets set by the GOI. The rising
demand or a wide range o telecom equipment has provided excellent opportuni-
ties to domestic and oreign investors in the manuacturing sector.35
Electronic components
The major categories o components that contribute majority o the share in pro-duction in the segment are writable Compact Disks (CDs), Colour Picture Tubes
(CPTs), Printed Circuit Boards (PCBs), writable Digital Versatile Disk (DVDs), con-
nectors, semiconductor devices, errites, and resistors.
Growth and turnover in the segment
The total production o electronic components during 20062007 was Rs. 88 bil-
lion remaining stagnant at that level since 20042005. However this is expected to
change and the segment is expected to grow to Rs. 95 billion during 20072008 ata growth rate o 8 per cent. This is because the serviceable market or proessional
grade components such as PCBs, semiconductor devices, connectors, antennas, etc.
is likely to go up due to the increase in indigenous manuacture o mobile phones,
STBs, DVD players, etc.36
Surge in mobile handsets and CEMs widening the scope o the sector
The worlds top ve mobile handset makers Nokia, Motorola, Samsung, Sony-Ericsson and LG Electronics have their manuacturing acilities in India. Presence
o global CEM majors like Flextronics, Jabil Circuit and Elcoteq Network is creating
35) Reerence has been made to Ministry o Communications and Inormation Technology (2008a)
36) Reerence has been made to Ministry o Communications and Inormation Technology (2008a)
-
7/29/2019 Electronic equipment industry india
26/38
24
potential or a jump in hardware manuacturing in India. This will naturally have a
trickle down eect as demand or components will increase as production increases.
Innovations in the sector driving growth
Developments in this segment have been driven by growth in the consumer elec-
tronics segment and more specically the CPT segment. In view o introduction
o fat panel colour televisions, the market or LCD panels has been rising ast. The
electronic components segment is experiencing growth in the optic bre segment
also with technological advancements making these at par with international
standards. Most o the top global semiconductor companies have set up their chipdesign centres in India. It is expected that chip manuacturing may start in India
also in the near uture. One o the manuacturers o Light Emitting Diodes (LEDs)
has developed a series o high power LEDs. These LEDs were a long time demand
o the Indian lighting market and are tailor made or use in solar lamps or home
lighting and ideally positioned to meet the Remote Villages Electrication program.
A low cost black and white television set with AM/FM radio has also been develo-
ped by a domestic company or the mass market and this can be tted into vehicles.
Such gadgets at aordable prices are alien to the Indian market and hence this cost
competitive innovation is reasonable compared to international models.37
Industrial electronicsThis segment o the electronic equipment industry plays a very important role. It
caters to strategically and economically important industries like Steel, Power, Che-
micals, Textiles and Transportation etc by providing them customized instrumen-
tation. It is characterized by the production o state o the art industrial electronicsequipment and systems, automation technologies and networking systems. Out o
these industries, the most crucial or the industrial electronics segment is the Trans-
portation industry and more specically the Indian Railways. The Indian Railways
is increasingly adopting the latest in power electronics equipment or their main-
line electric/ diesel locomotives and sub-urban train systems. India has the second
largest railway network in the world. Hence, this development is expected to lead to
tremendous growth in the segment.
This segment registered a turnover o Rs. 104 billion in the year 20062007 at a
growth rate o 18.2 per cent. During the year 20072008, the production in this
segment is estimated to be Rs. 119.5 billion registering a growth o 15.0 per cent.
37) The Institution o Electronics and Telecommunication Engineers (2007) has been reerred
-
7/29/2019 Electronic equipment industry india
27/38
25
Some o the largest manuacturers in the segment include Bharat Heavy Electri-
cals Limited (BHEL), Electronics Corporation o India, Rajasthan Electronics and
Instruments Limited and Masibus Process Instruments.38
Strategic electronicsThis segment is the smallest in the industry but is also one o the most important,
because o the criticality o development in technology targeting two aspects, the
technology being applicable to the strategic sector or deence purposes, and the
emerging state o the art technology which is not available o the shel and which
is denied due to its strategically sensitive applications. Denial o this technology hasnot allowed civilian and deence applications rom taking place. It is believed that
due to its critical nature, the technology can generate returns much aster. Hence
technology to cater to these critical applications needs to be developed and produ-
ced on a much larger scale. Various institutions are developing strategic systems and
Public Sector Enterprises (PSEs) are the largest in this regard. Some o the ocus
areas in the sector include the ollowing:
Securecommunicationandnetworking Navigationalaides(air/land/underwater)
Surveillancesystems(air/land/underwater)
Stateofthearttechnologydevelopmentformodernwarfaresystems
Navalcommunicationsystemsandsatellitemappingsystems
Advancedrobotics
The segment has witnessed steady growth rates since 20032004. The turnover
or the year 20062007 was Rs. 45 billion growing at the rate o 40.6 per cent. Theturnover estimate or the year 20072008 is Rs. 61 billion. Some o the major manu-
acturers o this equipment are Bharat Electronics, Midas Communication Techno-
logies, Fibcom India and Electronics Corporation o India among others.39
38) Reerence has been made to Ministry o Communications and Inormation Technology (2008a)
39) Reerence has been made to Ministry o Communications and Inormation Technology (2008a)
-
7/29/2019 Electronic equipment industry india
28/38
26
International trade scenario
The largest segments in the industry where international trade takes place areelectronic components and industrial electronics, where these segments account or
46.8 per cent and 24 per cent o the industry exports respectively. Most manuactu-
rers in the consumer electronics segment are ocusing on tapping the large domestic
market but many have begun and others plan to use their manuacturing acilities
in India to export electronic equipment to other markets.
ExportsExports in the electronic equipment industry increased by nearly 30 per cent in the
year 20062007. Despite a sudden drop in exports growth rate in 20042005, ex-
ports have been growing steadily since 20052006. Backed by big-ticket investments,
the companies are increasingly getting attracted to the advantages the country
oers in terms o availability o skilled manpower and signicant cost-reduction in
logistics and inputs. This enables the oreign companies to use their manuacturing
acilities or exports purpose also. The domestic manuacturers have also come o
age and export to the international market.40
VALUE OF EXPORTS IN SECTORS WITHIN THE ELECTRONIC EQUIPMENT INDUSTRY
Values are in Rs. Billion and growth rate is in percentage
Sector/Year 20032004 20042005 20052006 20062007
Consumer electronics 8.25 11.50 20.00 15.00
Industrial electronics 15.15 15.00 23.00 30.00
Computers 14.40 12.00 10.25 15.00
Communication and
broadcasting equipment 1.65 3.50 5.00 6.50
Electronic components 37.55 38.00 38.00 58.50
Total exports 77.00 80.00 96.25 125.00
Growth rate o exports 37.50 3.89 20.31 29.87
Source: Ministry o Communications and Inormation Technology
40) Reerence has been made to Ministry o Communications and Inormation Technology (2008a)
-
7/29/2019 Electronic equipment industry india
29/38
27
Increasing investments or setting up hubs or exporting
Since products manuactured in India are reaching international standards in terms
o quality, many companies have started ocusing on exports in addition to tap-
ping the large domestic market in India. The challenge is to supply competitively to
global markets. Some instances o this phenomenon are described below.
Haier, the Chinese durable goods manuacturing giant has acquired a acility in the
state o Maharashtra in West India to manuacture rerigerators, colour television
sets and washing machines. It is also upgrading the new acility with modern equip-
ment to create an R&D acility or rerigerators. The major reasons cited by the
Chie Operating Ocer o Haier, Mr. Pranay Dhabhai, were the easy availability o
inputs such as steel and uel, and the logistic advantages India provides. The reight
cost is almost 30 per cent less i one were to export rom India rather than China,
he said. Samsung is looking at its Sriperumbudur acility as a manuacturing hub
or Samsungs global operations, said Mr Zutshi, Deputy Managing Director, Sam-
sung India.
Chinese durable goods major TCL too plans to set up a manuacturing acility in
India, both or domestic and global operations. We are seeking regulatory appro-vals to set up a manuacturing unit somewhere in northern India, Mr Sudhanshu
Bhandari, Marketing Head o TCL, said.41
Development o hubs-advantages and downstream benefts
There are immense opportunities in the segment or manuacturers and the local
population also. Manuacturers benet because the advantages India provides in
terms o cost o production, logistical support, improvement in quality standards,strong engineering capabilities, etc can help companies to explore other global mar-
kets as mentioned earlier.
The socio-economic benet (downstream benet) is that a robust manuacturing
base would have multiplier eects like generation o employment and generation o
business to local SMEs, growth o the services and maintenance sectors etc. Thus in
other words, development o hubs can serve important business and socio-econo-
mic objectives that can lead to overall growth o the economy.42
41) The Hindu Business Line (2nd January 2008) has been reerred
42) Reerence has been made to ESC: Electronics and Computer Sotware, Export Promotion Council (25th July 2005)
-
7/29/2019 Electronic equipment industry india
30/38
28
Imports
India remains a major importer o electronic materials, components and nis-hed equipment, where imports exceed exports amounting to USD 12 Billion in
20042005 according to the National Manuacturing Competitiveness Council
(NMCC).43
The Associated Chambers o Commerce and Industry in India (ASSOCHAM)
ound out ater conducting a study on imports in the electronic equipment indu-
stry, that the main reason or the tremendous volume o imports and hence large
trade decit in the industry is the current tax regime in the country that restricts
growth in domestic manuacturing.
According to ASSOCHAM, India has the potential to compete with other Asian
economies where the contribution o the electronic equipment industry to the GDP
can be much higher than 1.9 per cent in 20062007, and more in the double digits
range like other countries in Asia such as South Korea, Taiwan and China. Thus
changes must be eected in the duty structure to enable higher production o elec-
tronic equipment domestically.
In its report ASSOCHAM mentioned that 21 million jobs (7 million jobs directly)
can be created within the country in the next ten years i most o the demand is
ullled through domestic production. To curb the excess imports the association
has suggested that the GOI raise customs duty on imports i.e. protect the industry
to enable domestic production to grow.44
This strategy though has not worked in the past and is the reason or the rather
slow development o the electronic equipment industry. Hopeully, the GOI willimplement policy changes that reduce protection, invite competition and make it
easier or domestic and oreign companies to manuacture in India or the domestic
and international markets.
43) Reerence has been made to National Manuacturing Competitiveness Council (2006)
44) Reerence has been made to The Hindu Business Line (11th February 2006)
-
7/29/2019 Electronic equipment industry india
31/38
29
Research and development
As is the case with the manuacturing sector in general, spend on R&D is limited inthe electronic equipment industry also. However, this realization is driving initia-
tives that are being taken to promote R&D in the industry. R&D or each o the
segments in the industry is being carried out in dierent groups. There are projects
that cover a wide spectrum including electronic components, discrete semicon-
ductor devices, microelectronics, photonic devices, sub-systems and technologies,
equipment and systems development, nanotechnology, medical electronics, teleme-
dicine and eld demonstration in dierent sectors o the economy like Transport,
Power, Steel and Textiles etc.
According to the Ministry o Communications and Inormation Technology the
ollowing measures need to be taken:
TopromotestrategicallyrelevantR&Dfordevelopinghighvalueaddedproducts
and services through both sponsored programs. To set up world class R&D cen-
tres. The GOI has to take a lead role through long term investments as well as to
encourage leading global companies to set up their R&D centres in India. Topromoteknowledge-basedindustriesandalsodevelopefcientproduction
technologies or cost reduction.
Continuousup-gradationoftechnologiesandmanufacturingprocesswhichis
essential or industrys survival in the global manuacturing environment.
Totakeinitiativesfordevelopingproductsandservicesforhandicapped
India is already turning into a major destination or Foreign Direct Investments
(FDI) in the Inormation Communication Technology (ICT) sector. World leaders
in ICT like Intel, Cisco, Microsot, Motorola, Ericsson, Nokia, Siemens and LG etc
have announced investment plans or R&D. Some examples are shown below:
Air-conditioningandrefrigerationmajorCarrierCorporationhassaiditwould
invest Rs 2 000 million in India during the next three years to build a new global
R&D centre, develop industry-leading products and technology or local markets
and signicantly enhance the companys manuacturing operations here.
-
7/29/2019 Electronic equipment industry india
32/38
30
Haier,theChinesedurablegoodsmanufacturinggiantisupgradingitsnewly
acquired manuacturing acility with modern equipment to create an R&D acility
or rerigerators. The acility would enhance the overall capacity o Haier and
would enable it to increase its customer reach in India as well as in the global
market, including West Asia and Arica.
SamsungalsohasR&DoperationsatitsmanufacturingfacilityinNorthIndia
both or hardware (product customization) and sotware development.
Future outlookThe electronic equipment industry is one o the worlds astest growing industries
but India has not demonstrated spectacular growth in recent years. However, as can
be seen rom the turnover gures, an upward trend has started in the industry that
is expected to be sustained over the coming years as demand conditions are only
expected to get better, with the main challenge or the industry being its capability
to be able to market its products in a competitive way in comparison to its Asian
counterparts.
Based on eedback and suggestions made during the Union Budget o India as well
as by industry associations like ESC India, ASSOCHAM and FICCI, the GOI is
seriously considering steps to address the taxation issues that are highlighted to be
a major reason or Indias trade decit in electronic equipment, slow growth and
small contribution to the GDP.
The global electronic equipment industry is driven by demand or products, which
are durable, lighter, cheaper, and better than the ones they replace. To meet the gro-
wing market demands, the large global manuacturers in the industry are gradually
shiting their base to Asia Pacic countries, which are the prominent sources o elec-
tronic components and are soon going to become primary destinations or consu-
mer electronics. There is an estimation that within 20 years, two third o the electro-
nics industry will be our times as big as today and hal o it will move into Asia.
Foreign collaborations and mergers are on a rise. A new wave o industrialization is
throwing up several business opportunities or the electronic equipment industry.
The uture seems prosperous or the industry in terms o the expected surge in
global demand and upsurge in investments. Positive trends such as over-capacity in
developed markets, globalization, technology advances, regulation and environme-
-
7/29/2019 Electronic equipment industry india
33/38
31
45) Reerence has been made to Investment Commission o India (2006)
ntal consideration, market ragmentation and product prolieration will lead to the
accelerated growth in the industry.
The projected turnover o the industry should not be i the industry is approxima-
tely USD 62 billion or Rs. 1 500 billion in the year 20092010. This, it is believed,
is only possible i there is substantial growth in exports, an increase in domestic
consumption at a CAGR o 33 per cent over the next ew years that is expected to
be driven by increasing demand or consumer electronics and mobile handsets,
and lesser dependence on imports. Another driver is the contract manuacturing
business. The global market or contract manuacturing is expected to be USD 500
billion out o which the Indian share is expected to be USD 11 billion.45
-
7/29/2019 Electronic equipment industry india
34/38
32
-
7/29/2019 Electronic equipment industry india
35/38
33
Reerences
Council or Electronics Hardware Associations (2007), India: The Vibrant Electronics Industry, Councilor Electronics Hardware Associations
ELCINA Electronic Industries Association o India (2006), Electronics, Environmental Requirements
and Eco-design: Overview of Developments in India, ELCINA Electronic Industries Association o India
ELCINA Electronic Industries Association o India (30th March 2008), Indian Electronics Industry,
www.elcina.com/industry.asp, ELCINA Electronic Industries Association o India
ELCINA Electronic Industries Association o India (2nd July 2008), Indian Electronics Industry, http://
www.elcina.com/industry_EMS_Contract.asp, ELCINA Electronic Industries Association o India
Embassy o India (April 2008), India Review, Embassy o India, Washington D.C.
ESC: Electronics and Computer Sotware, Export Promotion Council (30th March 2008), http://www.
escindia.com/htmlsite/AboutUs.aspx?Id=40, ESC: Export Promotion Council
ESC: Electronics and Computer Sotware, Export Promotion Council (25th July 2005), ESC: Export
Promotion Council
Indian Brand Equity Foundation (2007), Electronics October 2007, Indian Brand Equity Foundation
Investment Commission o India (2006), Opportunities in the worlds largest democracy, Investment
Commission o India
Meredith R (2007), The Elephant And The Dragon, W W Norton & Co Inc
Ministry o Communications and Inormation Technology (2008a), Draft Paper on National Electro-
nics/ IT Hardware Manufacturing Policy, Department o Inormation Technology
Ministry o Communications and Inormation Technology (2008b),Annual Report (20072008),
Department o Inormation Technology
National Manuacturing Competitiveness Council (2006), The National Strategy for Manufacturing,
National Manuacturing Competitiveness Council, New Delhi
-
7/29/2019 Electronic equipment industry india
36/38
34
Telecom Regulatory Authority o India (2006), Study Paper on Financial Analysis of Telecom Industry of
India and China, Telecom Regulatory Authority o India
The Hindu Business Line (11th February 2006), ASSOCHAM tells electronics industry to pull up its
socks, The Hindu Group o Publications
The Hindu Business Line (1st January 2008), Spate o high-end gadgets spurred durables growth,
The Hindu Group o Publications
The Hindu Business Line (2nd January 2008), Durables sector MNCs eye India as manuacturing
hub, The Hindu Group o Publications
The Hindu Business Line (29th November 2007), For a durable growth story, The Hindu Group o
Publications
The Hindu Business Line (28th July 2007), TN setting up electronic hardware park, The Hindu
Group o Publications
The Hindu Business Line (26th December 2007), Consumer durables growth to surpass 12%: FICCI,
The Hindu Group o Publications
The Institution o Electronics and Telecommunication Engineers (2007), IETE Technical Review, The
Institution o Electronics and Telecommunication Engineers, Volume 24 Number 3, New Delhi
The Wall Street Journal (5th September 2008), Electronics industry in India, The Wall Street Journal
World Economic Forum (2008), Global Competitiveness Report 20072008, World Economic Forum
-
7/29/2019 Electronic equipment industry india
37/38
-
7/29/2019 Electronic equipment industry india
38/38
Best.nr V110116
www.teknikforetagen.se