This report profiles India’s electronics industry, discussing market trends through 2014 and outlook for 2015 and beyond. The report also highlights leading players in the sector including Bharat Electronics Ltd, D-Link India Ltd and Sterlite Technologies Ltd.

Over the last few years, the Indian electronics industry witnessed a period of high growth with rapid surge in domestic consumption. The country has become one of the world’s largest markets for mobile phones, computer hardware and other consumer appliances in the last five years. However, around 65% of the country’s market demand was met through imports. The government is trying to reduce this high import dependency in the sector by focusing on production of value-added electronic products domestically. It has launched various policies and schemes in recent years, including the National Policy on Electronics (NPE-2012), Electronic Manufacturing Cluster (EMC) Scheme, Modified Special Incentive Package Scheme (M-SIPS) and the recently launched ‘Make in India’ campaign to stimulate electronics manufacturing in the country.

Electronics was one of the sectors that was not much affected by the country’s industrial slowdown during the last two years as far as demand is concerned. The credit goes to the consumer electronics segment which has recorded double digit growth during this period and has compensated for the decline witnessed in other segments. Flat panel display TV, smart-phones and tablets are leading the way for consumer electronics segment. But majority of the demand for these products are being met through imports which is straining the country’s trade balance. Global players dominate the Indian electronics market, while domestic companies have not been able to reap the benefits of the huge demand growth.

Going forward, we expect further growth and development in the Indian electronics manufacturing sector and a reduction in excessive dependence on imports. The demand however is not expected to fall anytime soon. The ever growing love of Indian consumers for devices like smartphones, tablets and LED TVs and their rising incomes bode well for this sector.

Key Points:

• Indian total electronic hardware production grew at a CAGR of 17% during the last seven years. Around 22% of total production was exported to other countries.

• The largest contribution to the electronics production in FY14 came from communication and broadcast equipment, accounting for 28% of the total. It was followed by consumer electronics with 26%. Together, these two segments accounted for more than half of the entire production turnover in the industry.

• Majority of the demand for electronic products in the country are being met through imports which is straining the trade balance. Electronic imports grew at a CAGR of 15% during 2007-12, but remained stagnant in FY13-14.

• Imports grew again in 9MFY15 indicating that electronics demand is not expected to fall anytime soon.