The total global electronics hardware industry is about US$2 Trillion, out of which, India’s Production was about US$ 47 billion during the year 2016-17. The domestic consumption in India was about $ 86.4 billion during the year 2016-17, while exports were about US$ 6 billion.
The current value addition in the sector ranges from 5-30% in India, depending upon the constituent of value chain. For example, it is around 25-30% in components, whereas, it is approx. 5-15% at SKD assembly level.
The Electronics sector has several verticals in terms of its main constituents. At present, the availability of Production data of this sector is limited.
|SI. No.||Item / Vertical||2014-15||2015-16||2016-17||2017-18 (Estimated till March 2018)||2017-18 (Actual Till March 2018)||2018-19|
|2.||Industrial Electronics||39,374||45,083||62,214||69,057||70300||80850 Est.|
|7.||Light Emitting Diodes (LED)||2,172||5,092||7,134||9,630||9630||13,000|
The total production of the aforesaid verticals of electronics sector in India is estimated to be about Rs.3,87,525 crore in 2017-18, compared to Rs.3,17,33 I crore in 2016-17, exhibiting a growth of about 22%. Asa result of various initiatives taken by the Government and efforts of Industry, production of electronics in India has shown significant growth during the last three years.
The Flat panel TV market has shown a substantial growth in the last 5 years as a result of digitalization of broadcast sector and increased affordability due to reduction in price. The production of LCD/LED TVs got a boost and has increased to 16.0 million numbers valued at about Rs. 26,400 crore in 2017-18, from 14.5 million Nos. valued at about Rs. 23,925 crore in 2016- 17, exhibiting a growth rate of about 10%.
The production for Home Theaters is estimated to witness a growth of about 0.76 million nos., valued at about FRs.924 crore in 2017-18,compared to 0.7 million nos., valued at Fts. 840 crore in 2016-17.
Consumer Durables / Home Appliances: This sub-sector comprising of Air Conditioners, Washing Machines, Refrigerators and Microwave Ovens has shown a growth rate of about 17.2% with a value of Rs. 44,590 crore in 2017-18, as against 13s.38,035 crore in 2016-17.
As per CEAMA, the overall production of this segment of electronics industry, including Consumer Durables / Home Appliances was Rs.64,742 crore in 2016-17 and is estimated to grow by 13.6% to about 13s. 73,524 crore in 2017-18.
The total production of Industrial Electronics during 2017-18 is estimated to be about Rs.69,057crore, as against!3s. 62,214 crore during 2016-17, exhibiting a growth of about 11%.
Industrial Electronics segment is dependent on overall growth in GDP and rate of growth of manufacturing. There has been steady increase in growth rate from 5.6% to 8.2% in GDP from QI of 2017-18 and QI of 2018-19
and manufacturing is growing steadily above 7%. Accordingly estimate for growth of Industrial Electronics for 2017-18 is revised to 13% (I3s.70,300cr) and 15% for 2018-19. This sector is also witnessing growth due to enhanced digitization and Robotics Applications in Industry 4.0.
Computer hardware comprises of Desktops, Laptops, Note Books, Tablets/ Net Books, Servers, other computing devices, Microprocessor based systems and Computer peripherals. With the advent of technology, varieties of mobiles, viz., smart phones and hand-held devices with the capabilities/ power/features of computers have been entering the market. Hence, the usage of conventional Desktops has diminished for personal purposes. However, the usage of the computers and its peripherals in commercial, industrial and Offices is likely to grow at a steady pace. The Indian computer hardware Industry has been undergoing a change in its product composition.
The production of computer hardware increased from Fts. 19,885 crore in 2015-16 to F3s. 20,382 crore in 2016-17, exhibiting a growth rate of 2.5%.
It is expected to reach to about Rs. 21,401 crore during the year 2017-18, exhibiting a growth rate of about 5%.
Mobile handsets and components manufacturing activity continued to accelerate during 2017-18. As many as 120 manufacturing units of Mobile handsets and components have been set up in India during the past three years. Out of these, about 59 units are producing mobile handsets and rest of them are engaged in manufacturing various components of mobile handsets, such as chargers/ adapters, battery packs, wired headsets, mechanical parts, USB cables etc., spread across India.
The production of Mobile handsets grew to approx. Fts.90,000 crore in 2016-17 compared to Fts.54,000 crore in 2015-16, exhibiting a growth rate of about 66%, whereas, the production of Mobile handsets is estimated to be about Fts. 1,32,000 crore in 2017-18. In volume terms, production grew to about 175 million in 2016-17, over 110 million in 2015-16, exhibiting a growth of about 60%, which is further estimated to grow to 225 million units in 2017-18.
Several initiatives have been taken during the year leading to significant investments in new manufacturing operations. Some of the important initiatives like Phased Manufacturing Programme (PMP) for mobile handsets have played a key role to transform the manufacturing space.
Electronics is a key area of defence technologies and become a vital component of nearly all the weapon systems, platforms and equipment designed and developed for defence purpose.
As per ELCINA, the production of Strategic Electronics has grown from Rs. 18,055 crore during 2015-16 to Rs.20,760 crore during 2016-17. The production is estimated to be about Rs.23,562 crore during 2017-18, exhibiting a growth of about 13.5% over 2016-17.
Since 2017 there has been focus on increasing defence production, R&D, in- digenization as well as support to MSMEs and start-ups. All the DPSUs have been activated and assigned ambitious targets for indigenization. However, the draft DPP 2018 has set a target of Rs. 1,70,000cr by 2025 and exports of Rs.35,000 cr. This requires growth rate of 17-18% annually over the next 7 years. Based on this it is estimated that Strategic Electronics will achieve a growth of 19-20% during 2018-19 (Rs.28,270cr). This is also because content of IT & electronics is growing in defence equipment.
As per ELCINAthe domestic production of electronic components for the year 2017-18 is estimated to be about Rs.58,351 crore vis-a-vis Rs.52,099 crore during 2016-17, exhibiting a growth of about 12%.
The electronic component industry has seen a positive shift in comparison to the estimated trend. The segment has recorded a production volume of Rs. 59132 crores as against the earlier estimated figure of Rs. 58351 crores. The probable reason for this performance may be attributed to increased demand for overall electronics in the country. Government has recently imposed custom duty on certain finished electronics goods thereby providing a positive differential for their manufacturing in the country. The custom duty on PCBAs has also been increased in last three-four years with an intension for strengthening the domestic EMS & Component segment in India. The PCBAs for the manufacture of mobile phones has also created a positive ecosystem for component manufacturing. The segment is expected to post CAGR of 14% during the year 2018-19 with manufacturing figures of Rs. 67706 crores.
It is, however, noteworthy that a significant share (over 70%) of this component production is being exported leaving about 25% for domestic consumption, which is used in domestic electronic equipment production. Majority of electronic components are not manufactured in the country and have to be imported. As such, Government has been taking proactive measures for promotion of domestic manufacturing of electronic components.
The Indian electronic component production is dominated by electromechanical components (like printed circuit boards, connectors, etc.,) with 29% share and passive components (like wound components, capacitors, resistors, etc.) with 24% share. Further, the shares of active components (like ICs, diodes, transistors, picture tubes, etc.) and the associated components (like optical disc, magnets, RF tuners etc.) of the components industry are about 18% and 29%, respectively.
The Electronics Manufacturing Services (EMS) industry in India is growing rapidly and key global players as well as a number of domestic companies are operational in the country. This segment needs very high efficiency of operations to stay profitable. Availability of components and an effective supply chain is vital for EMS companies for their growth. Domestic companies have generally followed the business model of staying in low-volume and high-mix business segments, where the margins are better.
One of the driving forces for growth in electronics manufacturing and for growing electronic components demand is the Indian Lighting market. The demand for energy efficiency has brought forward an immediate need for more energy efficient products, such as Light Emitting Diode (LED) products.
LED is the choice for next generation energy efficient lighting for its technical and economic virtues. Many countries have set LED as the national strategic industry. It is foreseen that LED products will have a penetration of about 75% by 2020. LED products save about 70% and 50% energy, as compared to the use of Incandescent Lamps (IL) and Fluorescent Lamps (FL), respectively. Over the years, opportunities for Light Emitting Diodes (LEDs) have increased in automobiles, communications, signage, signaling, architecture and entertainment sectors. The opportunity for LEDs in the general space illumination segment of residential and commercial buildings is expanding rapidly.
As per ELCINA, the LED Products manufacturing in India is estimated to reach Rs.9,630 crore in 2017-18, as compared to the production of about Rs.7,134 crore in 2016-17, exhibiting a growth of about 35%.
With the growth of Automobile industry and the increasing digitization of automobile controls, Automotive electronics has come to occupy an important segment of the electronics industry. Automotive Component Manufacturing Association (ACMA) has projected that Indian Automotive Electronics Sector will reach approximately Rs.36,500 crore by 2020. The global market for automotive electronics is set to account for 230 Billion US $ in 2020, from 140 Billion US $ in 2010. Some key technologies used in automotive electronics are as Anti-lock Braking System (ABS), Body Control Module (BCM), Tyre Pressure Monitoring System (TPMS), Electronic Power Steering (EPS) etc., while parking, cam, crank and oxygen sensors are the key sensors to be focused.
Medical devices play a crucial role from the diagnosis to the after-care phase of medical treatment and significantly impact affordability of and access to healthcare. As per the Annual Report of Department of Pharmaceuticals, the global medical devices market is expected to grow to US $ 332 billion by 2020, from an estimated US $ 228 billion in 2015 due to rising prevalence of chronic diseases; ageing population; increasing income and affordability, resulting in higher demand & utilization of healthcare services. The Indian market is among the top twenty in the world by market size, and fourth in Asia after Japan, China and South Korea. Indian market is import-dependent to the extent of 70%. The Government has also taken various steps to promote this sector, which include the following.
• 100% FDI in medical devices under automatic route
• Notification of Medical Device Rules 2017
• 'Make in India’ initiative for promoting indigenous manufacturing
• The development of a quality standardization framework in India that is based on international standards and certifies the quality, safety and performance of medical devices.
• Several policy measures to address the challenges of medical devices industry.
To promote scientific and technological research in Medical Electronics sectors in India, MeitY in association with Biotechnology Industry Research Assistance Council (BIRAC) is implementing Industry Innovation Programme on Medical Electronics (IIPME). The Project aims to fund a portfolio of Indian led pilot Projects that target innovations in the multi-disciplinary areas, comprising of electronics, engineering, medical devices, healthcare, software, algorithms and information technology. MeitY will provide a funding support of Rs. 10.5 crore over a period of 3 years, which has been extended till December 2019. Under this program, support is provided at Seed, Early transition and transitions to scale stages. 25 proposals are being supported through BIRAC under the programme out of which, 18 proposals are in Idea-to-PoC stage, 5 proposals are in Early Transition stage and 2 proposals are in Transition to Scale stage.
Government has taken several measures for the growth of the exports of Electronics Hardware sector. Special Economic Zones (SEZs) set up to enable hassle-free manufacturing and trading for export purposes and EHTP units are the major contributors to exports.
100% Income Tax exemption on export profits is available to SEZ Units for 5 years, 50% for next 5 years and 50% of ploughed back profits for 5 years thereafter. The Electronics Hardware Technology Park (EHTP) Scheme is an export oriented scheme for undertaking manufacturing of electronic goods.
Merchandise Exports from India Scheme (MEIS) benefits are available for export of electronic goods under the Foreign Trade Policy (Error! Hyperlink reference not valid.). The other schemes for export promotion are Export Promotion Capital Goods (EPCG) Scheme, Duty Exemption and Remission Schemes, Duty Free Import Authorization (DFIA) Scheme, Deemed Exports, etc.Due to the effective steps taken, exports have been showing signs of improvement during the year 2017-18, as compared to the year 2016-17.
As per the Directorate General of Commercial Intelligence and Statistics (DGCI&S)data, the export of electronic goods was US $ 5962.9 Million (Rs.39,979.6 crore) during 2016-17, as compared to US $ 5959.5 Million (Rs.39,063.5 crore) during 2015-16.
As per the DGCI&S data, the total import of Electronics into India in 2016-17 was US$ 42,878.9 million (Rs.2,87,558 crore), as compared to the import during the preceding year 2015-16, which was about US$ 40,939.8 million (Rs.2,68,105.3 crore), an increase of 4.74% in US $ terms and 7.26% in rupee terms.