India’s Electronics Industry: Rise and Focus

In India, electronic industry started off around 1965 with an orientation towards space and defence technologies. It was then rigidly controlled and initiated by the government. Later developments in consumer electronics took place mainly with transistor radios, black N White TV, calculators and other audio products. Colour Televisions followed in 1982, when the government allowed thousands of colour TV sets to be imported in the country to coincide with the broadcast of Asian Games in Delhi. Year 1985 saw the advent of Computer and Telephone exchanges succeeded by digital exchanges in 1988. The period between 1984 and 1990 was the golden period during which the country witnessed continuous and rapid growth.

In recent years the electronic industry is growing at a brisk pace. It is currently worth US$ 32 Billion and according to industry estimates it has the potential to reach US$ 150 billion by 2010. The largest segment is the consumer electronics segment. While the largest export segment is of components.

The electronic industry in India constitutes just 0.7 per cent of the global electronic industry. Hence it is miniscule by international comparison. However the demand in the Indian market is growing rapidly and investments are flowing in to augment the manufacturing capacity. The output of the Electronic Hardware Industry in India is worth US$11.6 Billion at present. India is also an exporter of a vast range of electronic components and products for the following segments-

  • Display technologies
  • Entertainment electronics
  • Optical Storage devices
  • Passive components
  • Electromechanical components
  • Telecom equipment
  • Transmission & Signaling equipment
  • Semiconductor designing
  • Electronic Manufacturing Services (EMS)

The Indian electronics market, estimated at $65 billion in 2010, has a comparatively smaller size against the global electronics market of $1.8 trillion. Despite its current minnow status, the Indian electronics market has gained global attention for the immense opportunities that remain uncorked.

This growth has attracted global players to India and leaders like Solectron, Flextronics, Jabil, Nokia, Elcoteq and many more have made large investments to access the Indian market. In consumer electronics Korean companies such as LG and Samsung have made commitments by establishing large manufacturing facilities and now enjoy a significant share in the growing market for products such as Televisions, CD/DVD Players, Audio equipment and other entertainment products.

The growth in telecom products demand has been breathtaking and India is adding 2 million mobile phone users every month! With telecom penetration of around 10 per cent, this growth is expected to continue at least over the next decade. Penetration levels in other high growth products are equally high and growth in demand for Computer/ IT products, auto electronics, medical, industrial, as well as consumer electronics is equally brisk. Combined with low penetration levels and the Indian economy growing at an impressive 7 per cent per annum, the projection of a US$150 Billion+ market is quite realistic and offers an excellent opportunity to electronics players worldwide.

The past decade has been remarkable for the Indian electronics industry from a consumption perspective: 18 million mobile phones in 2003 to 172 million units in 2010; shipment of 3 million PCs in 2003 to over 8.2 million in 2010; from a non-existent market in 2003 to a rapidly growing LCD TV market that witnessed sales of 3.5 million units in 2010.

The tremendous growth in all segments of electronics has given the industry a key position on the global map. The Indian electronics industry has been growing at a CAGR of over 25 percent in the past 5 years.

Indian Electronics industry has been characterized by an acute disparity between supply and demand.

Despite the continuous increase in electronics consumption in the country, indigenous electronics manufacturing has not reached desirable levels. Electronics production accounts for less than two percent of the country’s GDP. Also, locally manufactured electronics contributes less than one percent of the global electronics industry pointing towards the failure of concerted efforts. Electronics manufacturing in the country currently accounts for less than 60 percent of the consumption.

Some of the high growth sectors which needs to be focused for the future in terms of consumption volumes include:

• Communication handsets, communication infrastructure
• IT – desktops, notebooks, servers, and memory
• Consumer electronics – LCD TVs, set top boxes

The current low levels of indigenous manufacturing of these electronic products indicate the vast opportunities ahead for the electronics industry to tap. Going with the current growth and demand of innovative products, there seems to be a huge requirement of well trained Electronics Engineers in the India’s Electronic industry. Training provided by these companies is bridging the gap between student knowledge and industry requirements. Wide variety of products offered by such companies give an opportunity to the students to work on small real time applications and develop an understanding of underlying principles behind it. Right exposure and hands on experience will definitely give an upper edge while entering into an Electronics Industry.

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1 response to India’s Electronics Industry: Rise and Focus

  1. Basanti

    Nice one.. Gave me a clear insight on the progress of electronic industry in India.

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