The Indian electronics industry accounts for 0.7% of the global electronics industry, its growing at 30% annually and is worth $24 billion.
Changing Dynamics
The Indian electronics industry accounts for just 0.7% of the global electronics industry. According to Electronic Industries Association of India, the electronics products market in India is growing at 30% annually and is worth $24 billion now. At that rate, it would be worth $70 billion by 2010 and $160 billion by 2015.
So, it is not really surprising that many companies such as LG Electronics are setting up plants here. Chinese consumer durables manufacturer TCL Corp is also investing $22 million to set up a base for exporting CTVs to Europe and the Middle East.
India has been a major importer of electronics - the tally stood at over $12 billion in 2005. In contrast, the total domestic production is worth $11.6 billion. Of this, consumer electronics worth $3.65 billion were manufactured locally.
Experts say India has the potential to become a major consumer electronics and durables manufacturer. But, for that the government must cut taxes drastically.
Trade bodies and companies are fighting for a reduction of taxes to increase the penetration of consumer electronics in the country. Against 7% in Thailand, a colour television (CTV) attracts about 35% tax in India.
No wonder then that Thailand exports 15 million of the 17 million CTVs it manufacturers. In contrast, India manufacturers 10 million CTV sets of which barely a tenth are exported.
one big factor that is shaping up the consumer electronics market in the country is the China factor. The country is a source for a range of products like digital cameras, LCD monitors, MP3 players etc.
According to Mukesh Duggal, director, Mitashi Entertainment, an importer of electronics consumer durables, import duties should be bought down to spur consumption. “It (lower import duties) won’t impact the domestic industry since most of its products are manufactured in tax-free zones and these can compete with imported products,” he says.
According to a MAIT (Manufacturers Association of Information Technology), penetration per 1000 persons, for personal computers is expected to rise to 70 by 2010 from 14 now. Television sets penetration is expected to rise to 175 from 130 currently.
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