According to sources, the Indian electronics and hardware industry is predicted to grow at a compound annual growth rate (CAGR) of 13-16 percent to reach $112-130 billion by 2018. The current level stands at $75 billion.
The increase in percentage within 2013-18 is expected to be because of rising demand, growing disposable incomes, declining prices of electronics, wider broadband connectivity and e-governance programmes. The source to bring out such figures is 'Turning the Make in India dream into a reality for electronics and hardware industry’ by Assocham and Ernst and Young (EY).
According to Milan Sheth, partner and leader (technology), EY, the Make in India initiative, combined with global manufacturers are looking to relocate their manufacturing base from China to India, Vietnam and Indonesia. This is due to mounting labour costs that provides a strong impetus to the industry.
He further added that it presents an opportunity to become a manufacturing-led sector in India from being predominantly consumption-driven.
The source also brings out key demand-side and supply-side challenges faced by companies in this sector. It also presents some of the policy recommendations to strengthen electronics manufacturing in the country.
According to the resource, growing reliance on imports for electronic components and rapidly increasing demand for electronic products makes it crucial to enhance and strengthen India's electronics manufacturing capabilities.
About 50-60 percent of the demand for electronic products and the demand for nearly 70-80 percent of the electronic components market are fulfilled through imports. The electronics sector is expected to grow rapidly in the coming years and avenues will open for manufacturers to invest in the Indian market.
Companies are looking at increasing their manufacturing base in India to serve domestic markets and also the Middle East, Africa and SAARC countries. However, to ensure that momentum keeps pace, the industry and the government needs to work together, to make the Indian electronics industry highly competitive.