The test and measurement (T&M) industry in India has performed very well in the last few years, and the future also looks bright. This optimism essentially stems from the ambitions of the country’s power sector and growth in the aerospace, defence, telecommunications and consumer electronics verticals. Electronics Bazaar spoke to Deepak Thakur, CEO, Rishabh Instruments, to understand the evolving technology trends in the T&M industry in India.
EB: What is the scope of T&M instruments in the electronics industry?
T&M instruments (TMI) generally fall into three categories:
- General test and measurement equipment like signal generator analysers, multimeters, automated testers, clamp meters, etc
- Semiconductor related test equipment like digital testers, analogue RF testers, etc
- Communication test equipment like wireless and optical testers
Right now, we are focusing on the general test and measuring equipment category. We are evaluating an entry into the field of communication T&M devices.
While growth of the T&M instruments market in India is driven by several factors (which I will touch upon in further detail subsequently), it is pertinent to mention that one of the key drivers is the increasing domestic thrust on R&D, across sectors. T&M devices find widespread usage in the research and development space.
EB: Please share with us the market size and growth opportunities in the T&M industry.
The general-purpose test equipment market in India was estimated to be around US$ 200 million in 2016 and is growing at a CAGR of 12 to13 per cent, while the size of the wireless communications test devices market in India is currently US$ 40 million with a CAGR of 25 per cent. Electronic devices form a pivotal part of most commercial and industrial establishments. Telecommunications, aerospace/aeronautical, automotive and power are the sectors where T&M instruments have widespread applications.
In the Indian context, it is in these sectors that T&M plays the most crucial role, and where growth opportunities are extremely good. The fate of the T&M industry is highly dependent on how the electronics industry fares. As per reports, by 2022, India will emerge as a US$ 400 billion market for electronics, with domestic manufacturing of electronic products worth US$ 174 billion! There is indeed a huge potential for electronics in India in the near future and, therefore, the growth opportunities for TMI are immense.
EB: What are the major demand-generating applications in the T&M industry?
In the Indian market, as per my reckoning, the earlier-mentioned verticals provide the highest potential for growth. The communications industry accounted for the largest share of 56.90 per cent in the T&M equipment market in India. The growth of wireless technology will lead to an increased requirement for relevant testing equipment and devices. The aerospace and defence industries are the second largest end-user segments for T&M equipment domestically, accounting for a 18.93 per cent share and this is expected to increase to more than 20 per cent, with a CAGR of around 15 per cent. The consumer electronics segment is another major demand-generating vertical for T&M products in the country. Apart from these specific industries, the other application space with potential is the utility sector comprising generation, transmission and distribution.
EB: What is the latest trend that will define the T&M industry?
As I said, the telecom sector is projected to witness exponential growth with 3G and 4G network expansion proceeding at an unparalleled speed across India. This will be the driving force for the expansion of TMI in the country. The automotive industry will also contribute a significant portion of growth for T&M products. Besides, the conventional manufacturing sector will witness increased growth in demand for these products, for testing and maintenance. Another undeniably crucial segment in India is aerospace. Growth in air traffic, the increasing number of passengers, and the expansion of existing infrastructure are all major factors catalysing the T&M industry’s growth.
While India has not seen major capacity addition in recent times with respect to power generation, the transmission and distribution sector is undergoing aggressive expansion and refurbishment. This is another sector where TMI products are required.
India is being seen as the emerging solar hub of the world, with cumulative capacity of nearly 100GW to be installed in the next few years. Solar power is also a very important market for TMI products. The education sector is another relevant segment for T&M and Rishabh works extensively in this space. India has tens of thousands of students joining colleges every year for technical education (the ITIs, engineering colleges, etc). As part of the curriculum, they learn about electronics, electrical concepts and allied products, for which, they need to be exposed to measurement devices. This underscores the opportunities for the growth of TMI within this vertical. Overall, the TMI business volumes are projected to grow at an average annual rate of 25 per cent in India as per some published reports.
EB: Do share your views on the future of the T&M industry in India.
Evidently, there is huge potential in India for TMI products. Customers expect the products to be more user-friendly and with the most compatible technology. Within the overall instrumentation and metering vertical, T&M is growing the fastest. The progress in the telecom, automation, electronics and education sectors, along with increasing defence requirements, has influenced the boom in the T&M market. Internet penetration and wireless communication have witnessed significant growth in the country with the use of smart devices such as smartphones, smart watches, and smart TVs. The Digital India initiative of the government of India, and its Smart City programme covering 98 cities/towns (as of now) are all expected to further lead to better connectivity and increased digitisation in India. These developments over the medium to long term will also fuel the growth of the T&M equipment market.
EB: How is the T&M industry evolving with respective to the ‘Make in India’ initiative?
Though the T&M market is registering a steady growth, it does have its share of challenges. Imports of low quality foreign products that are sold by traders across India are harming the country’s self-reliance. Demand for T&M equipment will continue to grow as long as there is development in the country, which is seen as a given over the medium term. Rishabh Instruments is one of the few companies working with the Make in India initiative, and we also have plans to expand our manufacturing capacity over the medium term.