. Agenda. Overview of the Indian electronics and appliances marketThe Indian reality and opportunitiesChoosing India as a favorable manufacturing destinationGovernment initiatives to promote manufacturing. The Indian electronics and appliances industry is estimated at USD27.4 billion with a 7.1% growth last year .
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1. Electronics and durables manufacturing The India opportunity 28 August 2009
2. Agenda Overview of the Indian electronics and appliances market
The Indian reality and opportunities
Choosing India as a favorable manufacturing destination
Government initiatives to promote manufacturing
3. The Indian electronics and appliances industry is estimated at USD27.4 billion with a 7.1% growth last year
4. India continues to have < 1% of global manufacturing share
5. Significant opportunity exists in the domestic market Growth in per capita income (21% hike in 6th pay commission)
Shift in culture…replacement cycle down from 9-12 yrs to 4-8 yrs
Access to credit…20% of appliance sales were through credit
Government investment in infrastructure, especially electrification & infrastructure
Reduction in prices with the introduction of GST … from a peak of 30%
Growth of services industry
Innovative products at penetration price points
6. How can we leverage the potential ?
7. Low investment and lack of a leveraging of domestic demand has led to a low production share
8. Choosing India as a favorable manufacturing destination Provide a climate for R&D to create domestic products and generate local demand
Tax concessions, exemption from central and state government duties and taxes, single window clearance mechanism, permit foreign and domestic investment up to 100%with regulatory approvals.
Focus on current incentive policies to make them more attractive
There are several incentives offered by the Government to facilitate promotion of manufacturing facilities. Some of which are no license for electronic manufacturing, 100% tax emption for a block of 5 years. No customs duty on import of capital goods, raw materials etc, Reimbursement of sales tax on domestic purchases
Continue the investments in improving infrastructure for transportation
Investments in roads and bridges have increased from USD36 billion to USD 79 billion in a matter of 5 years. There is an increase of over 500% in the Investments in ports from the tenth to the eleventh five year plan
Supply of quality manpower
India has one of the largest pool of science and engineering graduates in the country. This availability of quality manpower is an important consideration for electronics and appliances manufacturing
9. Government can contribute significantly to promoting manufacturing in India Dedicated department for electronics and appliances
This sector is estimated to grow from USD28 billion to touch USD40 billion by 2012 at a CAGR of 11%.
Master plan for electronics and appliances sector
A long term vision should be developed in order to promote this sector and set up manufacturing facilities. Vietnam and China have become leaders with support from their Governments’ vision
Strengthen investment promotion activities
India should capitalize on all investment opportunities and take a proactive approach and develop custom packages to bring global firms to set up facilities in India
Currently the Government promotes R&D by awarding a 150% exemption on R&D expenditure. The Government should develop a framework to promote innovation of products through public private partnership mode facilitating introduction of products at penetration pricing
Expedite signing of trade agreements
India has now signed the FTA with ASEAN. Steps should be taken to expedite signing of other trade agreements which promote trade with other countries and help develop India’s capability
10. Thank you