“We see a huge potential in the Indian components industry in the coming years”

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IMG-20170204-WA0001The growth of the electronics industry has triggered the expansion of the electronic components industry as well. In a conversation with Electronics Bazaar, Chiranjeev Sachdeva, vice president of DDS International, points out that in order to facilitate the growth of the electronic components industry in India, the policy makers need reliable data about it, including the current production levels, the demand-supply position as well as future demand projections.

EB: What is the scope of the Indian electronic components industry?
As you can observe, the major share of India’s imports comprises electronic products, which are ranked just below petroleum products and gold. Our honourable prime minister has been emphasising on ‘Make in India’ since the last two years and now this programme has started showing results. Many international players are coming to India for electronics manufacturing, and domestic manufacturers, too, are investing huge amounts in it. The soul of the electronics manufacturing industry is the components. So we see a huge potential in the Indian components industry in the coming years.

EB: Please share with us the market size and growth opportunities of the electronic components industry.
Currently, the market size of the Indian electronic components industry is about US$ 10 billion and is expected to grow by 36 per cent, on a YOY basis. So there is a huge potential for employment in this industry, both in the trading and the manufacturing businesses.

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EB: What are the major demand-generating applications in the Indian electronic components industry?
The major demand is generated by both electronics exports and domestic consumption. The key areas in which we expect the most demand is mobile phones, chargers, consumer electronics, etc.

EB: What is the latest trend that will define this industry?
The defining trend is surely the speed of delivering the components with the highest quality standards. A major challenge for manufacturers in the Indian electronics industry has always been the unavailability of components locally, at reasonable prices. Today, the market is moving dynamically, with ever growing demand for components; so we feel the speed with which demand can be met will become the main driver for the components suppliers. Currently, the major demand for components is still being fulfilled by imports; so the speed of delivery possible with locally manufactured products will be the key driver.

EB: Could you share your views on the future of the Indian electronic components industry
The future of the Indian electronic components industry is very bright and with the Make in India initiative taking shape, more and more international players are coming to India for manufacturing. For example, from 2017, even the iPhone will be manufactured in Bengaluru. So we are looking forward to this immense growth in this industry.

EB: How is the government helping in the advancement of the electronic components industry?
The major step is the implementation of GST, which will not only help the electronics industry but all the major industries. The environment that is now being created by the Indian government in terms of encouraging local manufacturing is surely helping the components industry also.

EB: According to you, what is the effect of demonetisation on the electronic components industry? How did you cope with the situation?
Due to demonetisation, the major benefit for the electronics industry has been the growth in the organised trading of components. In India, there is a huge gap between the organised and unorganised trade of components, but due to demonetisation and the resultant shortage of cash, people are moving into the organised market and cashless transactions are on the rise. This will certainly bring about more reliability and confidence among the small manufacturers. As cashless transactions can be tracked, small traders have to necessarily become more responsible for the quality of the components they supply.
For us, demonetisation has been a boon because there has been a rise in our component sales. We have been in the organised market for a long time and have always sold our components with proper billing.

EB: What are your expansion plans and growth strategy?
Today we import electronic components from China and Hong Kong only, but we are spreading out to more countries like Taiwan and Japan. We feel that Indian manufacturers need more and more types of components, which cannot be sourced from China and Hong Kong alone. We are also entering into new areas like diodes, apart from switches, sockets, connectors and semiconductors, which we are already supplying. Our future plans include setting up manufacturing of some components which can be produced in India now, such as rocker switches.

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