Wed, Apr 26, 2017 | updated 07:28 AM IST

Indian electronics products to touch USD 75 bn by 2017, says ASSOCHAM-EY study

Updated: Sep 19, 2016 13:35 IST      
Indian electronics products to touch USD 75 bn by 2017, says ASSOCHAM-EY study

New Delhi [India], Sep 19 (ANI): The Indian electronic products industry in India is expected to grow at a CAGR of 10.1 percent to reach USD 75 billion by 2017 from USD 61.8 billion in 2015 with increasing penetration across consumer products especially in semi-urban and rural markets, along with government push for infrastructure development, locomotive and energy, there exists a significant opportunity for rapid expansion of this industry, adds the ASSOCHAM-EY joint study.

The electronic components industry in India was valued at USD13.5 billion in 2015, growing from USD10.8 billion in 2013 at a CAGR of 11 percent. The market is dominated by electromechanical components (such as PCB and connectors) which form 30 percent of the total demand, followed by passive components (such as resistors and capacitors) at 27 percent, according to an ASSOCHAM-EY study titled 'Turning the Make in India dream into a reality for electronics and hardware industry'.

India's attractiveness for manufacturers is growing due to availability of low-cost labor. Rising manufacturing costs in China and Taiwan are compelling manufacturers to shift their manufacturing base to alternate markets. In 2014, the average manufacturing labor cost per hour in India was USD 0.92 as compared to USD 3.52 of China, noted the study.

The Indian manufacturing ecosystem for electronics and hardware industry is still at a nascent stage and faces various demand side as well as supply side challenges are limited scale of operations and local component demand due to the nascent product manufacturing in India. Component demand in India is muted due to very limited value addition as primarily last-mile assembly takes place. Norms such as safety regulations for automotive, medical and industrial sectors have driven the uptake of electronic content globally.

However, manufacturers in India do not add high electronic content in the products due to limited industry-specific standards. The current market is dominated by secondary sales and primary sales are limited due to reduced disposable income in semi-urban and rural markets. The market penetration for most of the consumer appliances and electronics is currently lagging behind global average by up to 60 percent in certain categories and there lies huge untapped potential in rural markets (approximately 69 percent of India's households).

Although global markets are witnessing rapid consumer uptake as electronic content increases across verticals (e.g., automotive with applications around safety, connectivity, infotainment, consumer electronics, smart homes, etc.); India has a slower adoption as consumers remain highly sensitive to even a marginal increase in product prices.

Due to nascent stage of electronics manufacturing in India, scale of operations is low, resulting in reduced cost competitiveness. Traditional electronics manufacturing destinations such as China, Taiwan and South Korea have built significant capacities across manufacturing value chain (SKD assembly, CKD assembly, Semiconductor Assembly and Testing Services). In addition, emerging (Malaysia, Vietnam) destinations have also built capacities. Although labor cost is low in India, labor productivity is lower than traditional destinations.

The basic infrastructure for any industry comprises good roads, power, water, telecommunications, ports and logistics. In India, availability of these facilities is not up to the mark, even in established industrial estates. While the Government has notified Greenfield Electronic Manufacturing Clusters, they still remain un-operational due to infrastructure issues.

The lack of proper roads and sales infrastructure results in distribution challenges for companies catering to markets in small semi-urban cities, rural areas and remote villages. Additionally, from both import and export perspective, there is port congestion due to unavailability of containers and long documentation process.

Availability of relevant manpower is crucial to the development of any industry. Since the electronics manufacturing industry has high dependence on skilled manpower, especially for highly specialized activities such as electronics system design, IC design and manufacturing etc., the availability of talent with relevant skill sets assumes considerable importance.

Both SKD and CKD are labor intensive and require delicate handling and process adherence during the manufacturing process. With changing technology, the labor needs to be constantly trained. However, the current labor scenario in India poses certain challenges.

India's taxation system is complex, especially where indirect taxes are concerned. Currently, the base direct tax incidence in India stands at around 30 percent, whereas the corresponding tariff in other Asian countries is between 16 percent and 25 percent.

Although, the Government has proposed the implementation of Goods and Services Tax (GST) for a state-of the-art indirect tax system, there are concerns that the industry faces in terms of the clarity on the revenue-neutral rate, non-creditable tax on inter-state movement of goods, status of existing state incentives granted and transition from existing taxation system to GST regime.

Procedural and regulatory clearances are time consuming and complex. According to industry sources, it takes up to a year to set up a manufacturing plant in the country and a new production line could take up to six months to become fully operational.

Additionally, the refund processes and clearances to avail benefits under tax are highly cumbersome and time-consuming. Procedure to claim concessional duty on many raw materials/ parts/components used in manufacturing of electronics products has been recently simplified in the Union Budget 2016-17 by introducing the concept of self-assessment. (ANI)

New Delhi [India], Apr 25 (ANI): Self-regulatory organization and industry association of the microfinance industry in India Microfinance Institutions Network (MFIN) on Tuesday launched the financial literacy mobile app for microfinance clients.

Full Story >>

e-SOT, e-PRAN cards launched for Atal Pension Yojana users

Updated: Apr 25, 2017 18:16 IST     

New Delhi [India], Apr 25 (ANI): To benefit and digitally empower over 45 lacs Atal Pension Yojana (APY) subscribers, the facility of online viewing of the statement of transaction (e-SOT) and e-PRAN cards were launched on Tuesday.

Full Story >>

New Delhi [India], Apr 25 (ANI-NewsVoir): CFA Society India, one of the 147 CFA Institute member societies, jointly hosted its annual Putting Investors First event 'Rethinking Financial Services for Millennials' in association with the Institute of Chartered Accountants of India (ICAI) and National Securities Depository Limited (NSDL).

Full Story >>

New Delhi [India], Apr 25 (ANI-NewsVoir): India's largest financial marketplace for loans and credit cards Paisabazaar.com on Tuesday announced a first of its kind strategic partnership with YES BANK, India's fifth largest private sector bank.

Full Story >>

New Delhi [India], Apr 25 (ANI-NewsVoir): Delhi NCR residents can look forward to more bespoke travel experiences with Wanderers' Footprints Travel Boutique opening its first office in the Indirapuram area.

Full Story >>

New Delhi [India], Apr 25 (ANI-Newsvoir): AKAI India on Tuesday launched a new series of high performance, energy efficient air conditioners this summer.

Full Story >>

Aye finance empowers expansion of south Indian MSMEs

Updated: Apr 25, 2017 15:41 IST     

New Delhi [India], Apr 25 (ANI): In order to empower the expansion of the Indian MSME sector , Aye Finance is delivering business loans against mortgage or simple hypothecation accessible to India's thriving and underserved MSME sector.

Full Story >>

New Delhi [India], Apr 25 (ANI-NewsVoir): Achieving two major milestones for its LNG re-gasification project at Jaigarh port in Maharashtra on the west coast of India, H-Energy Gateway Private Ltd. signed an agreement with ENGIE for chartering its FSRU GDF SUEZ Cape Ann.

Full Story >>

New Delhi [India], Apr 25 (ANI): According to credit-rating body ICRA, the growth of the renewable energy (RE) sector was driven by the large capacity additions in the wind and solar power segments.

Full Story >>

New Delhi [India], Apr 25 (ANI): Aiming to strengthen its engineering footprint in Eastern Europe, IT major Infosys Ltd. on Monday announced the opening of its first office and delivery center (DC) in Karlovac, Croatia.

Full Story >>

Rannvijay Singh to be face of The Spartan Poker

Updated: Apr 24, 2017 19:55 IST     

Mumbai [India], Apr 24 (ANI-Businesswire India): Popular actor/ TV host and youth icon, Rannvijay Singh has joined hands with The Spartan Poker, country's leading and most popular poker gaming portal as their first brand ambassador.

Full Story >>

New Delhi [India], Apr 24 (ANI): Global specialist in energy management and automation Schneider Electric India on Monday announced its signing of an agreement with Naya Raipur Development Authority (NRDA) for the development of the first green field integrated smart city of Naya Raipur, Chhattisgarh.

Full Story >>

New Delhi [India], Apr 24 (ANI-NewsVoir): The grand celebration of Adarsh Star Samaroh 2017 was held at JECC Ground in Jaipur, Rajasthan. Adarsh Star Samaroh is an annual event from Adarsh Credit Co-operative Society to celebrate the success of the team leaders and advisors of Adarsh Credit Co-operative Society who have gathered from all across the country.

Full Story >>

New Delhi [India], Apr 24 (ANI): The new variants build on Vestas' 2 MW platform, delivering increased swept area and annual energy production while keeping the existing 2 MW nacelle and hub design.

Full Story >>

New Delhi [India], Apr 24 (ANI): LC Singh, Founder, Vice Chairman and CEO of Nihilent Technologies, a Pune-based global consulting and solutions Integration Company, addressed a large gathering of entrepreneurs, corporate executives, investors and mentors on 'How design thinking makes use of a collaborative approach in solving complex problems; and how 'empathy' lies at the core of the design thinking approach' at the flagship event of 'TiECON, Pune 2017', which took place recently at The Westin Koregaon Park, Pune.

Full Story >>

New Delhi [India], Apr 24 (ANI-NewsVoir): The tremendous response that our existing Indiqube centres have received in Bangalore, we are now expanding our footprints in city's shared work space map with launch of four new centers in important areas in order to cater to the growing demand for shared spaces.

Full Story >>

Ola launches biggest driver partner engagement initiative

Updated: Apr 24, 2017 12:44 IST     

New Delhi [India], Apr 24 (ANI): Taxi aggregator Ola on Monday announced the launch of 'Ola Partners League' - a unique virtual cricket game for its driver partners.

Full Story >>

New Delhi [India], Apr 24 (ANI): International Management Institute (IMI) conducted its 33rd Annual Convocation Ceremony at IMI-New Delhi campus where it awarded 299 students of the premier Business School with diplomas.

Full Story >>

L&Technology Services wins smart city and campus project

Updated: Apr 24, 2017 11:36 IST     

New Delhi [India], Apr 24 (ANI-BusinessWireIndia): L&T Technology Services Limited, a leading global pure play engineering services provider, announced the development of Smart City and Campus solutions that will be used to develop a smart office campus in Israel for a leading technology company - a result of its expanded partnership with Microsoft.

Full Story >>