The Indian Electronic Components Industry: An Overview

Over the next five years, accelerated local manufacturing of electronic products catering to growing domestic demand will drive the market for electronic components in India.

- Sudeshna Das

The Indian market for electronic products is poised for significant growth in the next few years. According to an ASSOCHAMErnst & Young (E&Y) study, the Indian electronics and hardware industry is expected to grow at a CAGR of 13 to 16 per cent during 2013-18, and to reach US$ 112 to US$ 130 billion by 2018 from the previous year’s level of US$ 75 billion. This growth will be driven by rising local demand and growing disposable incomes.

Moreover, adoption of high-end technology devices, technology-driven transformation such as roll out of 4G/LTE networks and the Internet of Things (IoT), policy and incentive boosts from the government, government initiatives like Digital India, Smart Cities, wider broadband connectivity, e-governance programmes and so on are driving accelerated adoption of electronic products. Growth of the electronics products industry has started driving the expansion of the electronic components industry as well.

Local brands under the Make in India initiative as well as global manufacturers looking to relocate their manufacturing base from China to alternate locations such as India, Vietnam and Indonesia due to mounting labour costs provide a strong impetus to the Indian electronics and hardware industry. This, in turn, presents an opportunity to the electronic components manufacturing industry of the country. Over the next five years, accelerated local manufacturing of electronic products catering to growing domestic demand will drive the market for electronic components in India.

Market mix

The electronic components market can be broadly bucketed under the following sub-categories:

a. Passive components: capacitors, resistors, wound components, crystals

b. Active components: diodes, transistors, integrated circuits, light-emitting diodes

c. Electromechanical components: printed circuit boards, switches, relays, cables, connectors