Electronics Industry in India

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Electronics is one of the fastest growing segments of the Indian industry. Today, the electronics industry is completely delicensed with the exception of aerospace and defence electronics.

The electronic industry in India constitutes less than 1% of the global market. The demand for these products however is growing rapidly and the investments are flowing in to augment the manufacturing capacity.


Among manufacturing industries, the electronics industry occupies a key position in modern science and technology. It plays a vital role in the fields of atomic energy, communications, defense, education, entertainment and space technology. Until the 1970’s the electronic industry was the most protected of all the Indian industries. The country’s electronics policy strongly favored self-reliance and technology and capital imports were strongly discouraged. This resulted in the electronics industry being highly underdeveloped till the late 1980’s. The industry was very inefficient producing outdated and low quality models at a very high cost.

Policy reforms were initiated in the early 1990’s with the liberalization of trade and industry sectors. With the change in the policy regimes after liberalization, the industry experienced restructuring.


The Indian electronics industry today stands at US $ 25 billion. It is ranked 26th in the world in terms of sales and 29th in the world in terms of production. It is growing at over 25% CAGR and is expected to be worth US $ 158 billion by 2015. This industry is one of the fastest growing industries in the country and is driven by growth in key sectors such as IT, Consumer Electronics and Telecom.

The demand for electronics is expected to be fuelled by the growth of

• Telecommunications (250 million subscribers by 2007)

• PCs and Notebooks (5 million every year)

• Broad-Band connectivity reaching rural areas (600,000 knowledge centres by 2007)

India is a major importer of electronics material, components and finished equipment amounting to US $ 20 billion in 2007. India imports electronic goods mainly from China. In the last 4 years production of computers has grown at a CAGR of 31%, the highest among the various electronic products in India. This had been followed by communication and broadcast equipment (25%), strategic electronics (20%) and industrial electronics (17%)

The production of consumer electronics in 2003-04 was estimated at Rs. 15,200 crore as compared to Rs. 13,800 crore in the previous year, growth of about 10%. This sector has continued to grow at a CAGR of 10% in the last 5 years. There is a reduction in the prices of consumer electronics products as volumes are increasing and competition is becoming fiercer. The consumer electronics segment includes a wide range of products such as DVD, VCD/MP3 players, television sets and microwave ovens.

The production of computers increases as the drop in the prices of the goods causes the demand for the goods to increase. PC penetration in households have increased significantly. Internet usage is also increasing. The information available on the internet is becoming richer and thus creating a favorable scenario for the growth of the industry.

The growth in demand for telecom products is increasing. India adds over 2 million mobile phone users every month. This growth is expected to continue over the next decade too.

Strategic electronics includes areas such as satellite based communication, navigation and surveillance, underwater electronics, infra red based detection and ranging, disaster management, GPS based surveillance tracking systems etc. while the bulk of this sector is being met by the defense PSU’s and DRDO, a number of units from the private sector are also contributing to this sector.



Rivalry among Existing Firms:

There are many players...
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