The Indian consumer electronics sector is a major contributor to the country’s economy, generating employment and driving GDP growth. As India aims to become a global leader in consumer electronics manufacturing, the upcoming Union Budget holds significant importance. With the ambitious goal of transforming into a $300 billion electronics industry, stakeholders are hopeful for measures that will propel the sector’s growth trajectory and address key challenges.
The development of robust technology infrastructure is essential for achieving the desired growth in the consumer electronics sector. This includes enhancing research and development capabilities, adopting advanced manufacturing technologies, and improving the overall digital ecosystem. Investments in these areas will not only improve the quality and efficiency of production but also foster innovation and competitiveness on a global scale.
Localization of raw materials and components is another crucial aspect. By reducing reliance on imports, particularly from countries like China, India can strengthen its economic stability and manufacturing resilience. The government should incentivize the development of local supply chains and support industries that produce essential components. This move will not only enhance the domestic manufacturing ecosystem but also contribute to bolstering foreign reserves and ensuring a steady supply of critical materials.
The previous budget’s announcement of the India-Middle East-Europe Economic Corridor hinted at significant export opportunities for the Indian consumer electronics sector. However, to fully capitalise on this corridor and explore additional export avenues, the upcoming budget needs to introduce measures that go beyond this initiative. Aligning with the nation’s developmental goals, the budget should focus on enhancing trade agreements, streamlining export procedures, and providing financial incentives to exporters. The materialisation of Free Trade Agreements (FTAs) with key markets can further open up new opportunities for the industry.
Currently, televisions larger than 32 inches are classified as luxury goods and subjected to a 28% GST. Industry stakeholders see this classification and the high tax rate as unfair, as televisions are no longer considered luxury items but essential household products. Revising the GST rates for televisions and other consumer electronics can make these products more affordable for a larger section of the population, thereby boosting domestic sales and encouraging local manufacturing.
Additionally, the implementation of anti-dumping duties is crucial to protect domestic manufacturers from unfair competition and ensure a level playing field. The government should review and adjust these duties as necessary to support the growth of the Indian consumer electronics industry.
As the consumer electronics industry evolves, there is a growing need for a skilled workforce capable of adapting to the demands of industry 4.0. The government should prioritise initiatives focused on upskilling and reskilling the existing workforce, as well as integrating advanced manufacturing and digital technologies into the education and training systems. By making the workforce industry-ready, India can ensure sustainable growth and maintain its competitive edge in the global market.
The future of the consumer electronics industry in India looks promising, with several developments indicating a positive trajectory. The government’s support for the “Make in India” initiative and the greenlighting of new manufacturing plants have provided a notable push to the industry. Continued support in the form of policy reforms, financial incentives, and infrastructure development will be essential for maintaining this momentum.
By addressing these key challenges, India can undoubtedly pave the way to becoming a global leader in consumer electronics manufacturing. Industry stakeholders remain hopeful that the budget will align with these expectations and contribute to the realisation of India’s ambitious goals.
Ankit Maini, Managing Director – Veira Group