The study undertaken by Assocham and EY India noted that the government's push for infrastructure development, locomotive and energy, poses a significant opportunity for rapid expansion of the domestic electronics industry.
Electronic components industry in India was valued at USD 13.5 billion in 2015, growing from USD 10.8 billion in 2013 at a CAGR of 11 per cent.
The market is dominated by electromechanical components such as PCB and connectors, which form 30 per cent of the total demand, followed by passive components such as resistors and capacitors at 27 per cent, the study pointed out.
In 2014, the average manufacturing labour cost per hour in India was USD 0.92 as compared to USD 3.52 of China, noted the study.
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However, it said 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.
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.
Even as 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.
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