Emerging markets to drive growth

- Advertisement -
- Advertisement -

India’s electronics industry constitutes only 0.7 per cent of the global pie, but despite its small size the industry has witnessed a healthy growth over the last five years. This growth is expected to continue from $45 billion in 2009 to $125 billion in 2014—an increase of 22 per cent annually. This promising growth will be partly driven by a number of emerging markets and the potential of many untapped markets. According to Jaswinder Ahuja, corporate vice president and managing director, Cadence Design Systems India, the demand in domestic electronics market is being generated by emerging segments and products, which is poised to grow further. “Some of the products like 4G phones, security devices, and some emerging markets like smart grid power, medical electronics, solar power, have tremendous growth potential in the electronics industry,” says Ahuja.

Since the penetration of products like TVs and mobile handsets is reaching the threshold level in urban areas, the markets for these products are shifting to semi-urban and rural areas. “Moreover, there are untapped opportunities in sectors like power electronics, LED lighting, security systems, medical electronics, strategic electronics, solar energy, rural sector, tier II and III cities, etc,” Ahuja adds.

By Sandhya Malhotra

- Advertisement -

Wednesday, February 17, 2010: India has a large, vibrant and fast growing economy with a large population of young people in the employable age that gives enough headroom to the industry for growth. Moreover, the country’s consumer class, which comprises people with annual income of more than $10,000, is growing rapidly. This concurrently reflects on the available aggregate disposable income in the economy that could be channelised to increase sales of electronic products.

Emerging markets

Consumer electronics: The Indian consumer electronics industry is estimated to grow at 10-12 per cent per annum in the next few years. The market for televisions in India is changing rapidly from the conventional CRT technology to flat panel display televisions (FPTV). Currently, the split between CRT and FPTV is around 97 per cent and 3 per cent, respectively. The share of FPTV is projected to increase at a robust rate in the near future. Also, demand for MP3 players and digital video appliances are anticipated to grow at double digit rates in the next few years. “The low penetration level of consumer electronics goods, coupled with increasing preference for luxurious goods, is attracting foreign as well as domestic players to the industry,” says a survey.

Moreover, over the years, the consumer electronics domains like mobile phones, computers, TVs, set top boxes, MP3 players, digital cameras and camcorders, have also witnessed remarkable growth. As per an IMRB study, desktop PC has grown at a CAGR (compound annual growth rate) of 28 per cent in the last six years (2002-2008), followed by UPS at 38 per cent and mobile phones at 73 per cent. With greater exposure to global trends, there is also an increase in demand for convenience and lifestyle products, which is creating the demand of high-end consumer products in the market.

Mohan Krishnan, senior vice president, IMRB International, says, “The aspiration for modern lifestyle in India’s urban areas has increased from 47 per cent in 2003 to 62 per cent in 2008. The rural household income is also growing rapidly. Hence, India will be a very interesting market for many digital gadgets by 2014. While mobile connections will double, broadband connections and DTH connections will grow by 30 times and five times, respectively, from 2009 to 2014.”

Solar and LED lighting segments: Two most promising markets are solar and LED lighting. Several big companies like Reliance, Moser Baer, Tata BP, Maharishi Solar, DD Berg, Titan Energy, OSRAM, Kwality Photonics, Wipro lighting, Philips India, GE MIC Electronics, Vignani Solutions and Regnant, have already diversified into solar and LED lighting.

Sharing his views on the growth prospects of solar power, Gurjit S Bharara, business head, solar group, Reliance Industries Ltd, says, “The government has promised 20,000 MW of solar power by 2022 under the Jawaharlal Nehru National Solar Mission, extending a support of Rs 90,000 crore for the development of the segment. India has the potential to produce 89,000 TW of solar power. Moreover, there is a huge demand for grid connected solar plants to electrify Indian villages. India is poised to become a $75 billion solar market by 2022.”

The stakeholders in the industry have welcomed the Indian Solar Mission that promises to open a new window of opportunities for the upcoming players. “It will benefit the companies through policies like mandatory renewable purchase profits, introduction of new technology, favourable tariff and job creation,” adds Bharara.

LED lighting is also creating a lot of momentum in the electronics industry. The current transition rate from traditional lighting solutions to LEDs is slow but steady. However, this market is set to see a very rapid growth in the next three to four years. According to a study by Frost & Sullivan, the Indian LED lighting market was worth Rs 1.8 billion in 2008, representing a mere 3 per cent of the total lighting industry. But it is expected to grow at a CAGR of 47.9 per cent, reaching Rs 12.7 billion by 2013. Verticals like railways, telecom, medical, advertising and event management use large quantities of LED display systems. Also, the industry is moving from conventional through-hole LEDs to surface mount devices (SMD) LEDs that are brighter with a wider viewing angle and suitability for mass manufacturing.

Factors inhibiting projected growth

The Indian electronics industry has an immense potential to grow but it can achieve this only if there are better and more frequent interactions between policy makers and industry stakeholders, who can help each other in absorbing and initiating new ideas.

The government has also realised its role in supporting the growth of the industry. “The government is no longer a spectator but has started working hand-in-hand with the industry in tapping the emerging markets,” says R Chandershekhar, secretary, department of information technology, Government of India. “The government wants to focus particularly on the hardware domain. As other sectors like electronics entertainment, telecom and communication are fueling local demand, the government will be extending more support to these emerging markets,” he adds.

However, P K Sood, chairman, Regnant Group of Companies, says, “Industry faces an acute shortage of trained manpower, resulting in poor or average quality products. The industry is not doing enough to generate trained professionals. Besides, there is a need for inclusion of technically sound professionals from industry in government standardisation committees.”

According to Krishnan, the current value addition is low (less than 17 per cent) due to less effective intellectual property rights, manufacturing ecosystem and lower income of the consumers. Hence, good quality products need to be made for the Indian market at low cost. “The government needs to act fast to encourage vendors to concentrate on producing end products instead of importing them. To make India self-sustaining, it is imperative to have a strong manufacturing base,” he says.

Electronics Bazaar, South Asia’s No.1 Electronics B2B magazine

- Advertisement -

Related Artcles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Exclusive

“More Chargers Provide Security And Confidence To Customers, Encouraging EV Adoption”

0
With an agenda to transform the EV industry, EarthtronEV has established 250+ charging stations on major highways across India. The company aims to interconnect...

5G RedCap To Transform IoT Module Shipments

0
Over 60% of IoT module shipments will originate from the Asian & Oceania region. Automotive sector is expected to be a significant driver. The...
XR Headset Quest 3, Meta

Global XR Headset Shipments See A Major Decline, Sony Rises

0
Sony grabbed a market share of 24% in 2023 up from 1% in 2022. Bulky form factor, and lag, hinder adoption by serious...

Buzz

Tenstorrent- RISC V cores

MosChip Collaborates With Tenstorrent For Advanced RISC-V Cores

0
Tenstorrent has selected Moschip due to their tape out expertise in design services. India’s MosChip Technologies has announced partnership with computing company Tenstorrent and to...

BYD Aims For 20% Increase In Yearly EV Sales

0
The company is targeting sales of 500,000 vehicles internationally this year, over twice the amount sold last year, and aims to increase that figure...

RRP Electronics To Invest ₹5000 Cr In OSAT and R&D In Maharashtra

0
Cricket legend Sachin Tendulkar is investing in this semiconductor facility. Such celebrated personalities investing in the sector could be a great asset to the...

Important Sectors

“More Chargers Provide Security And Confidence To Customers, Encouraging EV Adoption”

0
With an agenda to transform the EV industry, EarthtronEV has established 250+ charging stations on major highways across India. The company aims to interconnect...

BYD Aims For 20% Increase In Yearly EV Sales

0
The company is targeting sales of 500,000 vehicles internationally this year, over twice the amount sold last year, and aims to increase that figure...

RRP Electronics To Invest ₹5000 Cr In OSAT and R&D In Maharashtra

0
Cricket legend Sachin Tendulkar is investing in this semiconductor facility. Such celebrated personalities investing in the sector could be a great asset to the...

Subsidy Cuts Push E2W Makers Towards Budget Models

0
Electric two-wheeler manufacturers face reduced government subsidies and growing competition from established petrol vehicle brands in the upcoming fiscal year. These challenges compel them...

Nissan To Invest In Renault’s Ampere For EV Roadmap

0
The alliance aims to introduce both five-seater and seven-seater models for each brand in India. Japan's Nissan Motor has committed to investing in Renault's electric...

Manufacturing

JLR To Hire 250 Electrical Technicians For Future EVs

0
These new roles, part of a £15 billion investment, are in addition to 300 positions created last year by the British car maker. Jaguar Land...

Altmin India Partners With WMG To Advance Battery Tech

0
Altmin and WMG will collaborate to strengthen their global battery materials supply chain position by optimizing cathode materials and developing diverse cell designs across...

EVs To Cost Less Than Gas Vehicles by 2027, Says Gartner

0
Gartner predicts a faster decline in production costs compared to battery costs, which represent the most significant expense in an electric vehicle, accounting for...
MG

MG Motor To Set Up Battery Assembly Unit At Halol Facility

0
The company plans to investigate battery cell production in collaboration with external partners. Automaker MG Motor India is actively exploring the possibility of assembling and...

Servotech Boosts India’s EV Charging Infrastructure With Manufacturing Facility

0
The new facility is poised to start with an annual production capacity of 24,000 power modules and plan to scale up to 2.4 lakh...