OVERVIEW | OPPORTUNITIES
Electronics
Hardware
SIZE
Electronics Hardware is a US$15-billion (2006-07) industry in India
India constitutes 0.7% of the global market
Includes design, manufacture and assembly of products related to:
Consumer electronics (TV, DVD, Audio systems): about US$4.5 billion
Industrial electronics: about US$2.4 billion
Computers (PC, Servers, Laptops): about US$2.9 billion
Communication and Broadcast equipment: about US$2.2 billion
Strategic electronics: about US$1.0 billion
Electronic components: about US$2.0 billion
STRUCTURE
Indian industry caters primarily to the domestic market. Exports are limited to passive components like capacitors, resistors, wound components, CD-ROMs, colour picture tubes, etc.
India is becoming a manufacturing base in the areas of consumer electronics and telecom equipment
Major international players like Nokia, Motorola, Siemens, Texas Instruments, Matsushita, Alcatel, LG, Samsung, Sharp and Lenovo have already set up manufacturing operations in India; many more have R&D centres
International contract manufacturers like Flextronics, Solectron and Jabil Circuit have set up base in India
POLICY
100% FDI is allowed under the automatic route with a few exceptions:
Aerospace and defence equipment manufacturers require an
industrial licence
The government has recently announced a progressive Semi-Conductor Policy
Special incentive package for setting up semi-conductor fabrication and other micro and nanotechnology manufacturing industries.
Incentives include upto 25% subsidy towards capital expenditure
Electronic Hardware Technology Parks set up to encourage investment in the sector in several cities e.g. Chennai, Bengaluru and Cuttack
No custom duty on all the raw materials and inputs required in the manufacture of electronic equipment
No custom duty on all capital goods for IT & Electronics sectors
Rationalization of Sales Tax/proposed VAT on all Electronic Products to 4%
OPPORTUNITY
Electronics hardware
is growing at over 30% p.a.
OUTLOOK
The Electronics Hardware industry is expected to grow rapidly in the coming years
Projected US$62 billion in 2010 from about US$15 billion in
2006-07
44% CAGR in domestic consumption (FY 2007-FY 2010)
Rapid growth in exports
POTENTIAL
Availability of low-cost, high-skill manpower
Growing domestic market due to low penetration levels today
(see chart)
Domestic market provides opportunities in manufacture of consumer electronic goods and mobile handsets
Electronics Hardware is one of the largest and fastest growing
industries globally
New SEZ Act with duty-free imports and income-tax concessions will facilitate creation of large-scale manufacturing units for the
world market
Global market opportunities in Electronics Manufacturing Services
Contract Manufacturing: a US$500 billion outsourcing opportunity by 2010 of which India can tap US$11 billion
Design Services: US$7 billion projected by 2010
Component Exports: US$5 billion projected by 2010
Nokia and Elcoteq Network have set up a manufacturing base for mobile handsets in India
India could emerge as the next hub for semiconductor manufacturing
Major international chipmakers are planning to enter India
National Semiconductor policy to provide an impetus
Government expects to attract an investment of US$6-10 billion
by 2010
For additional information: Planning Commission (http://planningcommission.nic.in ), Ministry of Information Technology (http://www.mit.gov.in ), Electronics & Software Export Promotion Council (http://www.escindia.org ), Consumer Electronics and Television Manufacturers Association India (CETMA), (www.ibef.org , www.isaonline.org ) Indian Semiconductor Association
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