India Electronic Market Outlook to 2028

India Electronic Market Overview

• The India Electronic Market was valued at USD 9 billion. The market growth due to increasing demand for consumer electronics, such as smartphones, tablets, laptops, and televisions. The rising urbanization and increasing disposable income have boosted the purchasing power of Indian consumers, leading to increased adoption of smart devices.
• Major players in the market include Samsung Electronics, LG Electronics, Panasonic India, Sony India, and Xiaomi Corporation. These companies lead in terms of product innovation, manufacturing capabilities, and market penetration, making them dominant in their respective segments.
• Foxconn has withdrawn from its joint venture with Vedanta for semiconductor manufacturing in Gujarat, which was initially announced in September 2022 with a planned investment of $20 billion. Vedanta will now fully own the venture and is seeking new partners to fulfill its semiconductor production commitments.
• The state of Maharashtra, has emerged as a key electronics manufacturing hub, due to its strong infrastructure, availability of skilled labor, and proximity to major ports. Additionally, the Maharashtra governments industrial policy offers favorable incentives for electronics manufacturers, further boosting its dominance.

India Electronic Market Segmentation

The market is segmented into various factors like product, application, and region.

By Product: The market is segmented by product into Consumer Electronics, Automotive Electronics, and Industrial Electronics. Consumer electronics, including smartphones, televisions, and wearable devices, dominated the market by the increasing penetration of smartphones, rising demand for smart home devices, and rapid adoption of wearables.

By Application: The market is segmented by application into Communication, Consumer, and Healthcare. The communication segment held a market share due to the increasing demand for networking devices, routers, and fiber-optic equipment. This segment is dominated by the rapid expansion of the telecommunications sector, driven by the deployment of 5G technology.

By Region: The market is segmented by region into North, South, East, and West. The South region, due to the presence of major electronics manufacturing facilities and favorable government policies in these states has contributed to this dominance.

India Electronic Market Competitive Landscape

• LG Electronics: LG Electronics has invested 200 crore in its Pune facility to commence local manufacturing of side-by-side refrigerators. This move aims to enhance production capacity and cater to increasing demand in India, with a focus on sustainability and energy efficiency in its product offerings.
• Sony India: Sony has launched its 2024 BRAVIA TV lineup, featuring the flagship BRAVIA 9, which boasts Mini-LED technology with 325% more local dimming zones and 50% higher brightness than its predecessor. Prices range from $599.99 for the BRAVIA 3 to $3,299.99 for the BRAVIA 9, emphasizing enhanced audio and visual experiences.

India Electronics Market Analysis

Market Growth Driver

• Increasing Demand for Consumer Electronics: In 2023, the Indian market saw a surge in demand for smartphones and televisions, with over 38.9 million units shipped, contributing to electronics demand in India. The demand is expected to continue as more consumers upgrade to advanced devices featuring 5G technology. The launch of new smartphone models by leading companies is further driving the market.
• Government Push for Local Manufacturing: A key growth driver in the Indian electronics market is the Production Linked Incentive (PLI) scheme, offering incentives worth INR 40,951 crore over five years to boost domestic manufacturing. This scheme, focusing on large-scale electronics like mobile phones and semiconductors, is expected to generate additional sales of INR 20 trillion and create 2 million jobs by 2025, driving growth in the industry.
• Growing Adoption of Smart Devices: With the rise in smart home adoption, sales of devices like smart speakers, thermostats, and IoT-enabled appliances are increased in 2024. The integration of AI in electronics is creating demand for smart home ecosystems, which is driving the sales of connected devices. IoT-enabled devices in the healthcare and automotive sectors are also gaining traction, further contributing to the growth.

Market Challenges

• Semiconductor Supply Shortages: Indias electronics industry is facing challenges due to the global semiconductor shortage. In 2023, semiconductor imports were delayed by 4-6 months, hampering production across sectors such as automotive and consumer electronics. Leading manufacturers have reported a 50% backlog in production, and this is expected to continue into 2024.
• High Dependency on Imports for Raw Materials: Although the Indian government is pushing for local manufacturing, the sector remains highly dependent on imported components, especially from countries like China and Taiwan. The government aims to reduce this dependency by 2025, but achieving full self-sufficiency remains a challenge.

Government Initiatives

• Make in India Campaigns Impact on Electronics: India's government initiative aims to achieve$500 billionin electronics manufacturing by2030, with a focus ontariff rationalizationandskilling. This growth could create approximately6 million jobsand boost the sector's value from$155 billionin FY23, driven by mobile phone production, which constitutes43%of total electronics output.
• Tax Incentives for Electronics R&D: The 2024 Union Budget is expected to allocate tailored funding and tax incentives for semiconductor manufacturing and electronics product assembly. This includes a $10 billion subsidy for semiconductor manufacturing and packaging. Additionally, tax incentives will support the hiring of specialized talent and the development of data center infrastructure, positioning India as a global electronics manufacturing hub.

India Electronics Market Future Outlook

The future trends in the India electronics market include the rise of 5G and IoT technologies, growth in automotive electronics due to electric vehicles, increased focus on green and sustainable electronics, and advancements in local semiconductor manufacturing.

Future Market Trends

• Rise of 5G and IoT Technologies: By 2028, the Indian electronics sector will see a boost from the integration of 5G and IoT technologies. Telecom operators are expected to invest in 5G infrastructure by 2025, which will lead to a surge in demand for 5G-compatible devices, further propelling the electronics market.
• Expansion of Electric Vehicle Electronics: As India moves towards the widespread adoption of electric vehicles (EVs), the demand for automotive electronics is expected to skyrocket. By 2028, over 5 million EVs will be on the road, and the corresponding demand for automotive electronics such as infotainment systems, battery management units, and advanced driver-assistance systems will drive market growth.