Jul 25, 2019
India’s electronics industry has grown to become one of the largest consumer electronics markets in the Asia Pacific. Numerous factors are amplifying this growth in recent years. These include the growth of India’s middle-class population, increasing disposable income among its citizens, and dropping prices for electronics. Despite being considered a single economic class, its demographics are quite diverse. It’s estimated that India’s middle class will increase from 250M to 583M people by 2025, which will make it more than 40% of the population.
The percentage of middle-class Indians aged 25 or younger applying to universities has increased by more than 60% in the past decade and is expected to continue to rise. With this growing middle class has also come an increase in economic consumption. The adoption of high-end technologies is also contributing to the growth in consumer electronic devices. The introduction of major technology transitions like IoT and 4G/LTE networks is rapidly increasing consumer electronics adoption. India is already the Asia Pacific’s fastest-growing smartphone market, and its IoT market is projected to be worth $9B by 2020. [1,2]
India’s Electronics Market
The Indian government has initiated Smart City and Digital India projects to stir up demand for IoT within the national market. The digital banking sector, including payment banks and wallet players, raises demand for VSAT and POS mobile ATMs. These will give further impetus to the rapidly expanding electronics industry. The cumulative result of these advances and projects is that India has become one of the largest electronics markets in the world. Some estimates anticipate that India’s electronics market will reach $400B by 2025. Additionally, the consumer electronics and appliances industry is expected to become the 5th largest electronics industry in the world by the same year.
India experiences average annual growth rates of 26% in its electronics sector, 185% in mobile manufacturing, 17% in domestic manufacturing, and 8.60% in its hardware market. Projections also show that the Indian gaming market will be valued at more than $801M by 2022. The electronics market is currently expected to reach $228B by 2020. This was a significant increase from 2016-17 when it was valued at $100 billion. In 2015, India’s electronic products industry was worth $61.8B. India’s electronic products made up 82% of the overall market in 2015, with the remainder being electronic components. The entire electronic component industry was worth about $13.5B in 2015. Imports drive Between 70 to 80% of India’s electronic components market. 
Domestic Electronics Deficit
Despite the upturn in domestic manufacturing, India’s electronics production during 2018-19 is estimated to be Rs 4,58,006 crore (about $70B). In contrast, the global electronics production is estimated to be $2.1T (about Rs 136 lakh crore). Therefore, India’s share in global electronics production is about 3.3%. India’s domestic electronics hardware manufacturing sector faces a lack of level-playing field against competing nations on several disabilities, rendering the sector uncompetitive.
Several factors create this trade deficit: adequate infrastructure, domestic supply chain and logistics, high cost of finance, inadequate availability of quality power, inadequate components, limited design capabilities, and inadequacies in skill development. India’s government recognizes this imbalance for electronics as the 3rd largest contributor to imports and is working to correct this issue quickly. The government has taken a slew of initiatives; as a result, production of electronics in India has risen to an estimated Rs 4.58 lakh crore in FY19, growing at a compound annual growth rate (CAGR) of about 25% in the last four years, compared to a rate of 5.5% in 2014-15. 
India’s Technological Growth
Numerous factors are driving the continued growth in India’s electronics industry. These include Wi-Fi connectivity and routers, IoT, digital wallets, and machine-to-machine devices. The Indian government has set a goal of building 100 smart cities by 2020. Through its cloud initiative, known as Meghraj, India is moving fully into the world of e-governance services. The Indian government also connects educational institutions and laboratories through its National Knowledge Network (NKN). Finally, India is integrating renewable energy technologies by investing in solar-powered pump sets and water pumping stations. As part of ongoing efforts to continue increasing the growth of India’s electronics industry, the Department of Electronics and Information Technology (DEIT) has implemented several policies and projects. These are designed to promote further domestic production in the electronics industry.
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We contribute our 40 years of design and manufacturing expertise spanning multiple diverse markets. We look forward to discussing how we can deliver world-class products for OEMs across the globe. We understand our home Indian market, familiar with its vast regulatory and selling environments. We foster growth opportunities within India through our strong technology incubation ecosystem. We also assist global OEMs in entering the Indian market by leveraging the local supply chain and favorable operating environments for cost reductions.
Our flagship Chennai location opened in 2006 and lies within a Special Economic Zone (SEZ) for electronics manufacturing, offering economic incentives for imports and exports. This primary facility is within 90 minutes of the Chennai seaport and 20 minutes to the international airport. Additional road and rail connectivity links to the rest of India and beyond and infrastructure advantages with faster import and export clearances. We also have labor force flexibility, both technical and manual, to scale to demand rapidly.
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