Pushing “Make in India” agenda in electronics and hardware
India’s electronics and hardware industry – overview
Demand for electronic products in India is poised for significant growth in the next few years, drive by a strong economic outlook. The Indian electronics and hardware market grew by 8.6% YoY to reach US$75 billion in 2015, driven by rising local demand and growing disposable incomes. It is expected to grow at a CAGR of 13%–16% during 2013–18 to reach US$112– 130 billion by 2018.
Growing middle class population
Rising disposable income
Declining electronics prices
Adoption of high-end technology
Technology transitions such as roll out of 4G/LTE networks and IoT
Import dependence: Although India’s electronics and hardware industry is growing at a robust rate, majority of the demand is met through imports. Around 50%–60% of the demand for electronic products is fulfilled through imports, while nearly 70%–80% of the electronic components market is imports-dependent. Growing reliance on imports for electronic components and rapidly increasing demand for electronic products is making it indispensable to grow and strengthen India’s electronics manufacturing capabilities.
Limited local demand for components
Low primary sales resulting in limited penetration
Absence of industry-specific standards
High price sensitivity of Indian consumers
Role of “Make in India” in boosting electronics demand
The Government of India has treated the electronics sector as a priority under its “Make in India” program. This scheme promotes manufacturing in India to boost job creation and skill enhancement, facilitate investment, foster innovation, protect intellectual property, and build best-in-class manufacturing infrastructure. In line with this, it has announced several policy initiatives. It has also taken steps for creating a business-friendly and governance-oriented financial and economic environment. This has resulted in various Indian and global manufacturers announcing their expansion plans.
Announcements in the Union Budget 2016–17 supporting the electronics and hardware industry
The next step now is to incentivize companies to set up facilities for designing, engineering, testing and R&D of innovative products to bring the real “Made in India” product and make a mark in the global map as the favorable manufacturing destination.