Current trends in Indian Electronics Industry

The Indian electronics industry is growing at a rapid pace as electronics become more and more common place across a variety of gadgets in use. There are many changing trends in the Indian electronics industry which are quite obvious.

The electronics industry is classed into three sub-sectors: Electronic products, EMS (Electronics manufacturing services), and Electronic components. When the Indian market is taken into consideration, the sub-sector of electronic components is the major one.The employment opportunities in the electronics component sub-segment are the highest, in comparison with the other two sub-sectors.The bill of materials (BoM) of the electronic component sub-sector is almost half of the total electronic devices cost. The Indian electronics sector’s present value is approximately US$ 11 billion (Rs 82,500 crores). The Indian electronics sector is projected to grow very rapidly in the near term and is expected to grow very rapidly to be valued at about US$400 billion(Rs.30 Lakh Crores), by the year 2025. So by then, the value of the sub-segment of component manufacturing has to be around US$200 billion(Rs.15 Lakh Crores). These are ambitious projections for sure.Presently, the indigenously manufactured components constitute only one-third of the entire electronic components used in India. The majority of these components come from PCB assemblies and imports.

Let us have a look at some of the other key points related to the overall electronics industry of India.The Indian electronic sector is yet to reach the higher end, for most of its operations are confined to electronic product assembly.As of now, most of the governmental policies are aimed only at reducing duty on imports of electronic products/components. Much focus is not there on developing the manufacturing base. Till about two years back, the electro-mechanical components like connectors and PCBs were the dominant ones in the industry. There was good demand for capacitors and resistors, as well, which come under the category of passive components. Since of late, the scenario of the Indian electronics markets has changed. An increase in demand has been witnessed, about associated components and active electronic components.Currently, not many consumers are opting for offerings like DVDs/CDs and cathode ray picture tubes. It’s interesting to note that these were the products that enjoyed the highest demand in the electronics market of the subcontinent, in recent times.There is now a huge volume of exports from India encompassing entertainment electronics, display technologies, and optical storage devices, etc.Simultaneously, India’s over-dependence on imports from the USA and China also needs to be highlighted. It has been observed that electronic components to the tune of nearly 80% are being imported from these two countries.

China manufactured invasion and push-back from Indian domestic manufacturersAround a decade back, China entered the Indian market and started to sell electronic products. But, as a war-like situation is now there between the two countries, the presence of China in Indian market is treated as a major risk. The Indian Premier League has also removed the brand Vivo from the list of its sponsors. And recently, even the Government of India banned numerous Chinese apps. The same pattern is expected to be seen even in the electronics industry. On account of all these efforts, the day is not distant when the markets of our country would be free from products and services originating in China. IP Theft and lack of respect for IP is one more reason for avoiding Chinese manufactured products, even a pro-China country like Russia recently stopped the S-400 delivery due to cyber attacks originating from China on its defense research institutions.

Indigenization and domestic manufacture of electronicsThere is a lot of emphasis on indigenization and domestic manufacturing in India. The rise of Indian market has also offered an opportunity as the economies of scale are possible. With each passing year into the future, more domestic manufacturing is possible in electronics providing many jobs for highly educated and not so educated.

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