Electronics industry in India

ELECTRONICSELECTRONICSMarketOverview2CompetitiveAdvantages9GovernmentRegulationsandSupport14KeyDomesticandForeignPlayers18ContactForInformation30AreportbyKPMGforIBEFMarketOverviewTheglobalelectronicsindustryisgrowingrapidly.FromanestimatedsizeofUS$950billionin2005,itisestimatedtogrowtonearlyUS$2100billionby2010.ThemarketisdominatedbyAsiancountriessuchasChina,Taiwan,SingaporeandSouthKorea.Theindustryischaracterisedbyrapidinnovationandspeedtomarket,shortproductlifecycle,highlyautomatedmanufacturingtogiveconsistentqualityatlowcost,highvolumeproduction,continuousimprovementincapabilitiesforreducingcostsandprofitaccrualthroughvolumes.India’selectronicsindustryisnascentbyglobalstandards.Despiteapopulationofoveronebillion,Indiahasarelativelysmallelectronicsmarket.Itisrankedtwenty-sixthworldwideintermsofsalesandtwenty-ninthintermsofproduction.Thetotalsizeoftheindustryin2004-05wasUS$11billion.India’sElectronicssectorhassixkeysegmentsTheIndianelectronicindustryisdividedintosixsegments:Consumerelectronics,Industrialelectronics,Computers,Strategicelectronics,CommunicationandBroadcastingequipmentandElectroniccomponents.Theconsumerelectronicssectordominatestheindustrywith33.8percentshareandhasbenefitedfromalargeandexpandingmarket.Theindustrialelectronicsandcomputersectoreachhasashareofover15percent.ElectronicsProduction(2004-05)Consumer34%ElectronicsIndustrialElectronics15%Computers18%Commn.&Broad.Eqpt.9%StrategicElectronics6%Components18%Source:(T&M)instrumentsandmedicalinstruments.ComputersThissegmentincludespersonalcomputers,servers,workstations,supercomputers,dataprocessingequipmentandperipheralssuchasmonitors,keyboards,diskdrives,printers,plotters,digitisers,SMPS,modems,networkingproductsandadd-oncards.StrategicElectronicsThestrategicelectronicssegmentcoversSsatellitebasecommunications,navigationandsurveillance,underwaterelectronicsandinfraredbaseddetection,disastermanagementandGPSbasedVehicletrackingsystems.Thesegmenthasanumberofmanufacturingunitsbothinthepublicandprivatesectors.CommunicationandBroadcastingEquipmentThecommunicationandbroadcastingequipmentsegmentincludesdigitalexchanges(EPABX,RAX,TAXandMAX),TransmissionequipmentsuchasHF/VHF/Microwavetrans-receivers,satellitecommunicationterminals,opticalfibrecommunicationequipment,troposcatterequipment,two-wayradiocommunicationequipment,etc.ElectronicsComponentsTheelectronicscomponentssegmentcaterstotherequirementsofconsumerelectronics,telecom,defenseandinformationtechnologysectors.ThecomponentsinproductioninIndiaatpresentincludeTVpicturetubes(black&whiteandcolour),monitortubes,diodesandtransistors,powerdevices,ICs,hybridmicrocircuits,resistors,capacitors(plasticfilm,electrolytic,tantalum,ceramic),connectors,switches,relays,magneticheads,DCmicromotorsandtapedeckmechanism,PCBs,crystals,loudspeakersandhardandsoftferrites.Theconsumerelectronicsectoringeneralandthecolourtelevision(CTV)industryinparticularisthegrowthengineforelectroniccomponents.ThesectorhasbeengrowingsteadilyacrossmostsegmentsIndia’selectronicsindustryhasbeengrowingatapproximately11percentCAGRoverthepast5years,andwasworthUS$11billionin2004-05.Thefollowingsectionsdiscussthegrowthandcurrentstatusofeachofthesixsegmentscomprisingthesector.ConsumerelectronicsTheConsumerelectronicsindustrycontributesabout33.80percentofthetotalelectronicsproductioninIndia.ThetotalproductionofconsumerelectronicswasUS$3.74billionin2004-05,registeringagrowthof13percentoverproductioninthepreviousyear.Thegrowthhasbeenprimarilypoweredbycolourtelevisions(CTV),whichgrewfrom8.9millionunitsin2003-04toover10millionin2004-05.CTVgrowthinturnisdrivenbygrowthinFlatScreenTVs(FST)thatisestimatedtoconstitutenearly20percentoftheCTVmarket.OthergrowthsegmentsinconsumerelectronicsincludemicrowaveovensandVCD/MP3players-themicrowaveovenindustryisestimatedtobegrowingattherateof25-30percent.Source::