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Overview of Electronics India

By Spotlight - 26-03-2019

asing from USD9.8 billion in FY10 to USD24.66 billion in FY17 Demand growth, supply advantages & policy support have been instrumental in attracting FDI.


Multiple factors favour investment in electronics:

Growing customer base: Market for electronics is expected to expand at a CAGR of 66.1per cent during 2015–20. The demand for electronics hardware in India is projected to increase to USD139 billion by 2018.

Incentives & concessions under schemes: Export Oriented Unit (EOU) Scheme, Electronics Hardware Technology Park (EHTP) Scheme, Software Technology Park (STP) Scheme & EOU/EHTP/STP Schemes; IESA (India Electronics & Semiconductor Association) announced the launch of new chapters to strengthen & improve the supply chain. Chennai, also known as Electronic Manufacturing Services (EMS), is one of the fastest growing manufacturing cities, with easy accessibility to seaports.

Targeted reduction in import bill: Domestic electronic production accounts for around 45.0 per cent of the total market demand. Therefore, in order to reduce the import bill, the government plans to boost the domestic manufacturing capabilities & is considering a proposal to give preference to Indian electronic products in its purchases.

Increasing penetration in the consumer durables segment: Consumer durables market in India is characterised by low penetration in various product segments, viz. 1 per cent in microwaves, 3 per cent in ACs, 16 per cent in washing machines, 18 per cent in refrigerators, etc. Higher disposable incomes are leading to realisation of penetration potential in various product segments, especially in rural areas.

Policy & investment support: As per the targeted reduction in import bill, the government has proposed an investment of USD555.0 million for semiconductor manufacturing plants & USD222.0 million. In Union Budget 2016–17, inputs, parts, components & subparts for manufacturing of charger/adapter, battery & wired handsets / speakers of mobile phones are fully exempted from Basic Customs Duty (BCD), Counter Veiling Duty (CVD) & Special Additional Duty (SAD).

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