65 per cent of electronic items' demand met by imports: Report

Indian electronics design and manufacturing to reach $94 bn by 2015

The Indian electronic system design and manufacturing (ESDM) industry is expected to grow at a compound annual growth rate (CAGR) of 9.9 per cent to reach $ 94.2 billion by 2015.

This is more than twice the growth rate of the global ESDM market and presents immense potential for the domestic market. Currently, 65 per cent of demand for electronic products is met by imports in the country, and even the balance 35 per cent, which is manufactured in India, is mainly ‘low value added manufacturing’, according to a set of study reports released by the India Electronic and Semiconductor Association (IESA).

The IESA-Frost & Sullivan report analysed the growth and opportunity in the Indian ESDM market, while the ‘Disability identification study’ with Ernst & Young examined key macro issues impairing the growth of electronics manufacturing in the country.

They emphasised on developing an ecosystem for bridging the demand-supply gap and make concrete recommendations to the government to create a favourable environment for ‘high value added’ electronics manufacturing facilities in India.

The ‘Disability identification study’ focused on key issues across different electronic segments such as consumer electronics, IT systems and hardware and industrial electronics, and highlighted key issues preventing the growth of indigenous manufacturing of electronics in India.

The Frost & Sullivan report presented a detailed product wise SWOT analysis of 25 high priority products that account for nearly 82 per cent of the overall electronics consumption in India.

Of these, the top five product categories alone account for 60 per cent of the overall electronic consumption. Some of the high consuming ones are mobile phones (accounting for 38.85 per cent), FPD TV (7.91 per cent), notebooks (5.54 per cent) and desktops (4.39 per cent).  

It also captured four key components used in these 25 products, as the focus has to be for both products and component manufacturing. According to the report, 69 per cent of local consumption of the top 25 priority products is met through imports.

Commenting on the reports, Sanjeev Keskar, chairman, IESA, said, “As per the government’s National Policy on Electronics, 2012, we have a $100 billion investment target to meet by 2020. With the clear recommendations in this report, it’s time to adopt necessary changes to boost domestic product development and manufacturing. Ensuring speedy implementation of the new initiatives and taking corrective measures on certain key irritants will go a long way in building confidence ushering manufacturing investments in the country.”

Providing a favourable environment for developing the ecosystem in the country could eliminate disability costs associated with local manufacturing and lead to enormous development of the overall ecosystem. Focusing on the top 25 priority products along with key components could be a huge step forward in solving the problem, he added.

IESA is the premier trade body representing the ESDM industry.