Snapshot

Amplifying growth

The Indian Electronics industry is being driven by macro factors such as growing middle-class population and rising disposable income. In addition, declining electronics prices and adoption of high-end technology devices is leading to an uptick in consumption of electronics devices.

Furthermore, technology transitions such as the rollout of 4G/LTE networks and IoT are driving accelerated adoption of electronics products. Initiatives such as ‘Digital India’ and ‘Smart City’ projects have raised the demand for IoT in the market. Similarly, the digital banking sector like wallet players and payment banks will raise demand for POS and VSAT-enabled mobile ATMs, which will further give a fillip to the growing industry.

  • One of the largest electronics markets in the world anticipated reaching $ 400 bn by 2025
  • The Consumer Electronics and Appliances Industry in India is expected to become the fifth largest in the world by 2025.
  • The electronics market is projected to grow at a CAGR of 17% during 2014-2020

100% FDI is allowed under the automatic route.

In case of electronics items for defence, FDI up to 49% is allowed under automatic route and beyond 49% through the government approval.

For more details refer to FDI Policy 2017

  • 26%

    Sector growth (annual)

  • 185%

    Mobile manufacturing growth (annual)

  • 17%

    Domestic manufacturing growth (annual)

     

  • 8.6%

    Hardware market growth (annual)

A

The gaming market in India to reach $ 801 mn by 2022

B

Indian IoT market to reach $ 9 bn by 2020

C

Fastest growing smartphone market in Asia Pacific

Industry Scenario

Electronics market in India is projected to reach US $ 228 bn by 2020 from over $ 100 bn in 2016-17

The electronics products segment contributed 82% to the overall market in 2015, while the rest comprised electronic components.

The Electronic Products industry in India was valued at $ 61.8 bn in 2015, which is further segmented as follows:

  • Mobile devices (27%)
  • Consumer electronics (18%)
  • Industrial electronics (15%)
  • IT/Office automation (10%)
  • Automotive electronics (8%)
  • Telecom (8%)
  • Strategic (Aerospace and Defence) (7%)
  • Medical devices (4%)
  • Others (3%)

The Electronic component industry was valued at $ 13.5 bn in 2015; of which Electro-mechanical segment had the highest share at 30%. Passive and active segments handled 27% and 22% share, respectively, while remaining market of 20% was handled by the Others segment. Nearly 70-80% of the electronic components market is imports-driven.

Growth Drivers

  • Digital media

    Digital wallets, Wi-Fi connectivity: IoT, routers, Machine to Machine devices

  • Smart cities

    Goal to build 100 smart cities by 2020

  • Government cloud initiative

    “Meghraj” – cloud adoption for e-governance services

  • National Knowledge Network (NKN)

    The government aims to connect educational institutes and labs

  • Ultra mega solar project

    Solar power driven pump sets & water pumping stations

  • Open

    Duty Exemption and Remission Schemes

    Duty exemption schemes enable duty free import of inputs req…

  • Open

    Electronics Development Fund Policy

    This Policy provides a framework to set up an Electronics De…

  • Open

    Electronics Manufacturing Clusters Schem…

    Scheme to provide world-class infrastructure for attracting…

  • Open

    Modified Special Incentive Package Schem…

    The proposed incentives scheme will provide a level-playing…

  • Open

    National Policy on Electronics 2012

    Government's vision is to create a globally competitive elec…

Major Investors

Data on Map

FAQ

Frequently
Asked Questions

  • Is Foreign Direct Investment allowed in the ESDM sector in India?

    Foreign individuals, companies, foreign institutional investors, foreign venture capitalists, foreign trust, private equity fund, pension/provident fund, sovereign wealth fund, partnership/proprietorship firm, financial institutions, non-resident Indians/person of Indian origin, etc. can invest in India, either on their own or in the form of a joint venture. 100% FDI is allowed under the automatic route in the ESDM sector. However, in defense electronics, subject to industrial license, FDI up to 100% is allowed. (Upto 49% under the automatic approval route and above 49% is under Government route on case to case basis, wherever it is likely to result in access to modern and ‘state-of-art’ technology in the country). The Government has also approved 100% FDI in medical devices via automatic route. There will be no need for Foreign Investment Promotion Board’s permission to acquire an existing company or set up a new manufacturing unit in the medical devices sector. The investor will need to comply with the reporting requirements of the RBI and comply with all other relevant central & state laws & regulations.

  • What are different Electronic Manufacturing Clusters?

    Foreign individuals, companies, foreign institutional investors, foreign venture capitalists, foreign trust, private equity fund, pension/provident fund, sovereign wealth fund, partnership/proprietorship firm, financial institutions, non-resident Indians/person of Indian origin, etc. can invest in India, either on their own or in the form of a joint venture. 100% FDI is allowed under the automatic route in the ESDM sector. However, in defense electronics, subject to industrial license, FDI up to 100% is allowed (Upto 49% under the automatic approval route and above 49% is under Government route on case to case basis, wherever it is likely to result in access to modern and ‘state-of-art’ technology in the country). The Government has also approved 100% FDI in medical devices via automatic route. There will be no need for Foreign Investment Promotion Board’s permission to acquire an existing company or set up a new manufacturing unit in the medical devices sector. The investor will need to comply with the reporting requirements of the RBI and comply with all other relevant central & state laws & regulations.

  • Can existing units claim benefits under M-SIPS?

    The MSIPS is applicable to investments in new ESDM units, expansion of capacity/modernization
    and diversification of existing ESDM units. ESDM unit shall mean a unit engaged in design and 
    manufacturing of the electronics and nano-electronics and their accessories. It includes all stages of
    value addition and also includes electronics manufacturing services.
    Expansion of existing unit would mean increase in the value of fixed capital investment in plant &
    machinery of an ESDM unit by not less than 25% for the purpose of expansion of
    capacity/modernization and diversification.

  • What are the objectives of the national policy on electronics?

    Government of India has notified the national policy on electronics in 2012. Some of its main
    objectives include:
    1) Achieve Net Zero Import by 2020.
    2) Achieve a turnover of $ 400 billion by 2020 with investments of $ 100 billion.
    3) Generating 28 million jobs.
    4) Build strong supply chain of raw materials, parts and electronic components.

  • What is Electronics Development Fund Policy?

    Electronics Development Fund Policy provides a framework to set up an Electronics Development Fund (EDF) as a Fund of Funds which will foster R&D and innovation in technology sectors like electronics, IT and nano-electronics. EDF will support Venture Funds and Angel Funds, which will be professionally managed and are dedicated to these sectors.

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