India electronics growth to outpace China

NEW DELHI: The electronics market in India, at $11.5 billion in 2004, will be the fastest growing electronics market worldwide over the next several years, reports In-Stat. This market is expected to grow at a CAGR of 23 percent by 2010 to reach $40 billion, the high-tech market research firm says.

According to the press release, though its total output will be far behind China's electronics market, worth $271.97 billion in 2004, India's promising market bears watching. India's low manufacturing costs in skilled labor and raw materials, availability of engineering skills, and opportunity to meet demand in the populous Indian market, are driving its electronics market.

"Major challenges facing the Indian electronic manufacturing market are an infrastructure that needs to be improved at the earliest, easing of foreign investment procedures, which is underway, and a restructured government tariff that now makes domestically manufactured goods more expensive than imported goods with zero tariff," said In-Stat analyst Bryan Wang.

Key players in the Indian electronics market are Flextronics, Jabil Circuits, TVS Electronics, Solectron Centum, LG Electronics, Tata Infotech, Samsung India, Celetronix India and Bharat Electronics Ltd.

Emerging new players include D-Link and WeP, while Samtel and Tyco are already significant and will continue to emerge as global players in the export arena.

Nokia and Elcoteq are expected to set up manufacturing plants for handsets in south India.

The In-Stat report also found that the Indian electronics industry is driven mainly by the computer and

computer component sectors. About 25 percent of the Indian population lives below the poverty line, but a large and growing middle class of 320-340 million have disposable income for consumer goods.

According to In-Stat, the main challenge for China's electronics industry is to keep up with technology trends.