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E L E C T R O N I C S
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ELECTRONICS
Market Overview 2
Competitive Advantages 9
Government Regulations and Support 14
Key Domestic and Foreign Players 18
Contact For Information 30
A report by KPMG for IBEF
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Market Overview
The global electronics industry is growing rapidly. From an
estimated size of US$ 950 billion in 2005, it is estimatedto grow to nearly US$ 2100 billion by 2010. The market is
dominated by Asian countries such as China, Taiwan,
Singapore and South Korea. The industry is characterised
by rapid innovation and speed to market, short product life
cycle, highly automated manufacturing to give consistent
quality at low cost, high volume production, continuous
improvement in capabilities for reducing costs and profit
accrual through volumes.
Indias electronics industry is nascent by global standards.
Despite a population of over one billion, India has a relatively
small electronics market. It is ranked twenty-sixth worldwide
in terms of sales and twenty-ninth in terms of production.
The total size of the industry in 2004-05 was US$11 billion.
Indias Electronics sector has six key segments
The Indian electronic industry is divided into six segments:
Consumer electronics, Industrial electronics, Computers,
Strategic electronics, Communication and Broadcastingequipment and Electronic components. The consumer
electronics sector dominates the industry with 33.8 per cent
share and has benefited from a large and expanding market.
The industrial electronics and computer sector each has a share
of over 15 per cent.
Electronics Production(2004-05)
Consumer
34%
Electronics
Industrial
Electronics
15%
Computers
18%
Commn. & Broad.
Eqpt.
9%
Strategic
Electronics6%
Components
18%
Source: http://www.mit.gov.in/dbid/eproduction.asp#2
Consumer electronics
Consumer electronics consists of products that are directly
consumed by end-users, such as televisions, VCD/MP3 players,
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microwave ovens, etc. This segment has a large manufacturing base, and is
quite competitive, with presence of several global players in India.
Industrial Electronics
The Industrial electronics segment includes products that are used by other
industries, such as process control instrumentation, automation systems, Test
and measuring (T&M) instruments and medical instruments.
Computers
This segment includes personal computers, servers, workstations,
supercomputers, data processing equipment and peripherals such as monitors,
keyboards, disk drives, printers, plotters, digitisers, SMPS, modems, networking
products and add-on cards.
Strategic Electronics
The strategic electronics segment covers Ssatellite base communications,
navigation and surveillance, underwater electronics and infra red based
detection, disaster management and GPS based Vehicle tracking systems.
The segment has a number of manufacturing units both in the public andprivate sectors.
Communication and Broadcasting Equipment
The communication and broadcasting equipment segment includes digital
exchanges (EPABX, RAX, TAX and MAX), Transmission equipment such as
HF/VHF/Microwave trans-receivers, satellite communication terminals, optical
fibre communication equipment, troposcatter equipment, two-way radio
communication equipment, etc.
Electronics Components
The electronics components segment caters to the requirements of
consumer electronics, telecom, defense and information technology sectors.
The components in production in India at present include TV picture tubes
(black & white and colour), monitor tubes, diodes and transistors, power
devices, ICs, hybrid microcircuits, resistors, capacitors (plastic film, electrolytic,
tantalum, ceramic), connectors, switches, relays, magnetic heads, DC micro
motors and tape deck mechanism, PCBs, crystals, loudspeakers and hard and
soft ferrites. The consumer electronic sector in general and the colour
television (CTV) industry in particular is the growth engine for electronic
components.
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The sector has been growing steadily across mostsegments
Indias electronics industry has been growing at approximately11 per cent CAGR over the past 5 years, and was worthUS$ 11 billion in 2004-05.
The following sections discuss the growth and current status of
each of the six segments comprising the sector.
Consumer electronics
The Consumer electronics industry contributes about 33.80 percent of the total electronics production in India. The totalproduction of consumer electronics was US$ 3.74 billion in2004-05, registering a growth of 13 per cent over production inthe previous year. The growth has been primarily powered bycolour televisions (CTV), which grew from 8.9 million units in2003-04 to over 10 million in 2004-05. CTV growth in turn isdriven by growth in Flat Screen TVs (FST) that is estimated to
constitute nearly 20 per cent of the CTV market. Other growthsegments in consumer electronics include microwave ovens andVCD/MP3 players - the microwave oven industry is estimated to
be growing at the rate of 25-30 per cent.
Source: http://www.mit.gov.in/dbid/eproduction.asp#2
Electronics Production
0
2
4
6
8
10
12
1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05
US$billion
Source: http://www.mit.gov.in/dbid/eproduction.asp#2
US$million
0
500
1000
1500
2000
2500
3000
3500
4000
1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05
Consumer Electronics Production
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These trends are a reflection of increasing consumption and aspiration levels
among Indian consumers, driven by demographic and lifestyle changes. Asthese trends are positive for the future, the outlook for consumer electronics
segment is quite positive.
Industrial Electronics
The production of industrial electronics in 2004-05 was US$ 1716 million ascompared to US$ 1327 million in 2003-04, a growth of 29 per cent.
Growth in industrial production and focus by industry on better controls,processes and systems are expected to drive growth in this segment in thefuture.
Computers
The production in computers segment was US$1,961 million during 2004-05 as
compared to US$1479 million during 2003-04, a growth of 33 per cent.
Source: http://www.mit.gov.in/dbid/eproduction.asp#2
US$million
Industrial Electronics Production
0
200
400
600
800
1000
1200
1400
1600
1800
1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05
Source: http://www.mit.gov.in/dbid/eproduction.asp#2
US$million
Industrial Electronics Production
0
200
400
600
800
1000
1200
1400
1600
1800
1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05
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Communication & Broadcasting Equipment
The production in the communication and broadcasting
equipment sector was US$1,025 million during 2004-05.
Source: http://www.mit.gov.in/dbid/eproduction.asp#2
Strategic Electronics Production
0
100
200
300
400
500
600
700
1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05
US$m
illion
Source: http://www.mit.gov.in/dbid/eproduction.asp#2
US$million
Communication and Broadcasting
Equipment Production
0
200
400
600
800
1000
1200
1400
1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05
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The industry, in the area of PCBs, connectors, diskettes and
CDs, experienced a positive growth.
High corporate consumption and buoyancy in small towns isdriving sales of Personal Computers. The market for PCs is
estimated to have touched 3.4 million units in fiscal 2004-05,
taking the total PC penetration to 14 million in the country.
Strategic Electronics
The production in the strategic electronics sector was US$680
million in 2004-05 compared to US$588 million in 2003-04, a
growth of 16 per cent.
With the opening of strategic electronics to the private sector,
there has been an emphasis on attracting private sector
organisations for indigenisation of a variety of products and
technologies. This is expected to fuel growth in this segment.
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Growth in this segment has been almost stagnant over the past 5 years.
Electronics Components
Electronics components contributed 18 per cent to the overall electronics
production. Production in this sector was US$ 1,961 million during 2004-05
compared to US$ 1,719.3 million in 2003-04; a growth of 14 per cent.
The key product groups that have driven growth in components include CTV
picture tubes, optical discs, PCBs, connectors, ferrites, etc. Growth in this
segment has been primarily due to growth in the user segments, viz, CTVs,
PCs, etc. As such, the outlook is also positive.
Exports
Most of the consumer electronics produced in India is consumed by the
domestic market, with exports forming only 5 per cent of the production.
Source: http://www.mit.gov.in/dbid/eproduction.asp#2
US$million
Electronic Components Production
0
200
400
600
800
1000
1200
1400
1600
1800
2000
1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05
Source: http://www.mit.gov.in/dbid/eproduction.asp#2
US$million
Electronics Exports
0
200
400
600
800
1000
1200
1400
1600
1800
1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05
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However, exports of electronic goods from India have been
growing consistently and constituted about 2.64 per cent
of Indias overall exports in 2003-04. For the year ending
March 2005, the export of electronic goods from Indiaincreased by 16 per cent to US$1,950 million as compared
to US$1,675 million in the year ending March 2004.
Segment-wise Exports
Electronic components segment contributes the highest towards
the total electronics exports. The major export items include
passive components, such as capacitors and resistors; wound
components; CD-ROMs; connectors; color picture tubes and
computer components/assemblies, such as head stacks;
memory modules and RFID products. In 2003-04 India
exported US$ 817 million worth of electronics components,
which formed 48 per cent of the total electronics export.
Other key segments that contributed to exports include
industrial electronics, computers and consumer electronics,
with exports of US$ 329 million, US$ 313 million, and US$ 179
million respectively in 2003-04.
The main destinations for Indias exports are the European
Union, ASEAN countries and the United States.
The major export opportunities are in the area of innovative
new products, contract manufacturing (OEM and ODM) and
design services. It is estimated that India will export OEM
(Original Equipment Manufacturer) and ODM (Original Design
Manufacturing) worth US$11billion by 2010.
Source: http://www.mit.gov.in/dbid/eproduction.asp#2
US$million
Electronics Exports(Segment-wise)
0
200
400
600
800
1000
2000-01 2001-02 2002-03 2003-041999-2000
Consumer Electronics Industrial Electronics Computers Components
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Competitive Advantages
While the Electronics sector in India is currently small, there are several
advantages that India offers that can be effectively leveraged to achieve highergrowth. These can be categorised under four heads:
Manpower
Market Demand
Supporting institutions and
Policy and Regulatory Support
These areas are further discussed below
Availability of skilled human resources in India at competitive cost is akey advantage for the electronics sector
Indias human resources advantage derives from three key features Availability
in terms of numbers, Capability in terms of the right skills and Low costs.
India has the potential to ensure adequate availability of manpower tosupport the electronics industry well into the future
Indias population is predominantly young in 2001, nearly 54 per cent of the
population was less than 25 years of age. By 2013, nearly 200 million more
people will join the nations productive age bracket representing a quantum
growth in the consumption class. This implies that India will have a large pool
of productive manpower well into the future.
Indias manpower is trained and has a good mix of capabilities
India produces over 500 PhDs, 200,000 engineers, 300,000 non-engineering
postgraduates and 2,100,000 other graduates each year. The Indian Instituteof Technology (IITs) and The Indian Institute of Management (IIMs) produce
graduates and post graduates with best-in-class skills and capabilities in
technical and management fields. Indias capabilities in IT and engineering make
it an attractive location for sourcing engineering services such as R&D and
design.
Labour costs in India extremely competitive when compared to otherdeveloping countries
Indias cost of skilled labour is among the lowest in the world. For example,
average labour rate per employee in the electronics sector is about
$3,000 per year. Labour cost as a percentage of value added is only
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21 per cent in India as compared to 23 per cent in China and
30 per cent in Taiwan. Taking advantage of this many MNCs
have set up manufacturing bases in India for domestic
consumption as well as exports.
Many multinational companies in the electronics sector have
leveraged Indias manpower advantage to grow in the domestic
marke, as well as source products and services from India.
Examples include:
Kodak
Kodak has a camera manufacturing and assembly plant nearBangalore, which produces over four million units per year.
Around 60 -70 per cent of this centres products are exported
to the US, Europe, West Asia and the Far East in 2003.
Siemens
Production cost arbitrage has prompted the company to
increase production and hence exports from the Goa factory.
Siemens Goa plant is used as a manufacturing hub for catering
to the international market. The Goa factory will become the
hub for manufacturing X-ray tubes as it can save 30 per cent of
the cost.
Motorola
Motorolas Global Telecom Solutions Sector (GTSS) designs,
develops, manufactures and supplies infrastructure equipment for
wireless communications systems worldwide. GTSS India
operates a Centre of Excellence for providing network
services for customers in India as well as in the Asia Pacific
Region. Motorola India Electronics Ltd. develops software for
Motorolas worldwide businesses.
Motorola Global Software Group (GSG), the Research &
Development arm is involved in all the major developments of
the company. Motorola Indias operations are established as a
source of software and chip design and as a source of excellent
capital for Motorola globally. Motorolas two chip designing units
around Delhi and a third one in Hyderabad are 100 per centexport units meeting the companys global requirements.
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Solectron
Solectron is looking at using its Bangalore factory to contract manufacture
low-priced machines for Advanced Micro Devices.
Electrolux
Electrolux has set up Research and Development (R&D) centre with an
investment of US$ 8.6 million. It is the headquarters of its South Asian
Association for Regional Cooperation (SAARC) countries, excluding Sri Lanka.
This centre will be the regional hub for developing new technologies and
products.
Philips
Several Philips India employees are working on key regional/ global Philips
projects, committees and assignments. Several managers who started as
employees of Philips in India are now based in Philips organisations across the
world.
Samsung
Samsung invested US$ 11 million in setting up an R&D in India. Samsung R&DCentre at Noida helps the company customise its CTV range as per the
preference of Indian customers.
Indian market provides favourable demand conditions for the elec-tronics sector to grow
India has been experiencing a strong growth in the demand of consumer
products and durables in recent years, driven by consumer demographic
trends. This has facilitated growth in the electronics sector both directly and
indirectly.
Growth in demand of consumer durables such as CTVs, VCD / MP3 players
and PCs directly benefits the sector. Also the demand for products such as
automobiles, white goods, air-conditioners, textiles, etc, leads to growth in the
electronics sector as these products contain a significant number of electronic
components. At the same time, consumer demand has boosted growth in
Indias overall manufacturing sector as well, which, in turn, has a positive
impact on industrial electronics.
On the whole the domestic market in India is very attractive from the pointof view of the electronics sector, and current trends indicate high growth
potential for the sector in the future.
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Some of the key trends that have a positive impact on the
sector are:
Growing consuming class (defined as people having annual
income of
US$ 980 (INR 45000) or above) that has greater disposable
income and propensity to spend. It has been estimated by
NCAER that this group will constitute over 80 per cent of
the population of India by 2009-10
Lifestyle changes such as greater exposure to global trends
and increasing affinity for convenience and lifestyle products
Increasing urbanisation, emergence of nuclear double income
families
Low penetration levels of most consumer durables. Forexample, in 2002, only 66 per cent of middle-income
households had a TV set, only 28 per cent of the urban
households possessed a refrigerator, while just a little over
15 per cent owned an air cooler. Despite a population of
more than 1 billion people, only 16 million computers were
used in India in March 2005.
Increased government and private industry spending on
sectors such as defence and aerospace. The Indian aviation
sector, for example, has placed orders for more than 350
aircrafts with a list price of about US$ 26 billion.
In recognition of Indias domestic market potential, Samsung
has selected India as one of the top six strategic markets
in the world along with the US, China, Russia, Germany and
Thailand.
Presence of supporting industries in India is a source ofstrength for the electronics sector
Educational and Research Institutes
India has a well-developed technical and tertiary education
infrastructure of over 250 universities, 1500 research institutions
and over 10,000 higher education centres. Indian Institutes of
Technology (IIT) and Indian Institute of Science (IISc) are the
premier institutes of education and research.
These institutions provide not only a steady supply of trained
and qualified manpower to support the electronics sector,
but also support for research and analysis, testing anddevelopment.
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IT Industry
Indias capabilities and infrastructure in the IT sector are well recognised. The
presence of a mature service industry in India can accelerate the growth ofthe electronics sector.
Examples of companies that have been leveraging the supporting institutions in
India include:
Flextronics
Flextronics is the first EMS (Electronics Manufacturing Services) provider to
offer embedded and application software development for telecom
infrastructure customers. Flextronics acquired a 55 per cent controlling
interest in Hughes Software Systems (HSS), an Indian provider of softwareproducts and services to telecom infrastructure companies. The company is
positioning itself as a complete outsourcing solution to telecom OEMs. This
partnership offers significant opportunities to cross-sell respective products and
services to a very complementary telecom customer base.
Canon India
Canon India set up its Software Development Centre (SDC) in Delhi, which is
one of the six such cutting edge technology centres of its kind. It is ISO
9001:2000 certified with CMM level 3 status. Software Development Centre
undertakes contract software development from Canon Inc., Canon
Development Americas and Canon Information Systems Research, Australia.
For example it was involved in developing software for Office Imaging
Products division of Canon Inc., Japan.
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Government Regulations and Support
India has made the transition from being a sort of controlled
economy to a free market. Foreign investment up to 100 percent is possible in the Indian electronics industry to set up units
exclusively for exports. It is now possible to import duty-free all
components and raw materials, manufacture products and
export it.
EHTP (Electronic Hardware Technology Park) is an initiative to
provide benefits to companies that are replacing certain imports
with local manufacturing. EHTP benefits include export credits,
no duties on imported components or capital equipment,
business tax incentives, and an expedited import-export process.
The government, in an attempt to encourage manufacture of
electronics in India has changed the tariff structure significantly.
Customs duty on ITA-1 items (217 items) has been abolished
from March 2005. All goods required in the manufacture of
ITA-1 items are exempt from customs duty.
Customs duty on specified raw materials / inputs used for
manufacture of electronic components or optical fibres /
cables has been removed.
Customs duty on specified capital goods used for
manufacture of electronic goods has been abolished.
Excise duty on computers has been removed.
Microprocessors, hard disc drives, floppy disc drives and CD
ROM drives continue to be exempt from excise duty.
Intellectual Property Rights
Protection of Intellectual property rights (IPR) is a prime
requisite for development of R&D and innovation in the
electronics sector. The Government of India has developed a
robust IP act to facilitate innovation, growth and development.Several amendments to the Copyright Act, creation of a new
Trademark Act, a new Designs Act and amendments to the
Patents Act show Indias continued effort to protect IPR.
The country has already made several changes in its IP acts
over the years.. Several amendments to the Copyright Act,
creation of a new Trademark Act, a new Designs Act and
amendments to the Patents Act show Indias desire to change
and adapt. New acts have also been enacted to cover semi-
conductors and layout designs which will be of considerable
importance to the electronic industry.
In the current WTO regime, India is a party to the Trade
Related Aspects of the Intellectual Properties (TRIPs)
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Agreement and has accordingly, amended most of its IPR Acts and Rules to
conform to the said Agreement. The Indian Copyright Act 1957 was amended
in 1999; the patent Act 1970 was amended in 1999 & 2003 and Trademarks
and Merchandise Marks Act 1959 was overtaken by a new Trademark Act1999. The Industrial Design Act 1911 was effectively replaced by The Design
Act 2000, and The Layout Design of Semiconductor integrated Circuit Act
2000 was enacted.
The agreement on TRIPs takes care of the intellectual property rights by
enforcing the patent rights, copy rights and related rights, and the protection
of industrial designs, trade marks, geographical indications, layout designs of
integrated circuits and undisclosed information. Accordingly, the member
nations are asked to modify their existing laws. Once these laws come into
force, unauthorised use of the patented innovations, trade marks, etc. becomes
difficult. Enforcement of the TRIPs agreement makes the production of anyproduct possible either through internal innovation or through formal transfer
of technologies.
The electronics sector is expected to continue to benefit from supportive
policies and become globally competitive.
Regulations
Free Trade Agreement
WTO regime which came in force in 2005, results in zero customs duty on
imports of all telecom equipment. 217 IT/electronic items were covered under
the Information Technology Agreement (ITA) of the WTO for complete
customs tariff elimination by 2005.
Out of these 217 items, several items were already at NIL customs duty. In
fact, IT/electronics was the first sector in India to face complete customs tariff
elimination. The ITA-1 would result in intensifying competition as more
imported products will be easily available at lower prices.
Foreign Investment Policy
FDI
Foreign investment up to 100 per cent is allowed in Indian electronics
industry set up exclusively for exports. The units set up under these
programmes are bonded factories eligible to import, free of duty,
their entire requirements of capital goods, raw materials and components,
spares and consumables, office equipment etc. Deemed export benefits are
available to suppliers of these goods from the Domestic Tariff Area (DTA).A part of the production from such units is permitted to be sold in
the DTA depending upon the level of the value addition achieved.
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The FDI approval for electrical equipment (including computer
software and electronics) from January 1991 to March 2004 was
US$ 7.29 billion, which was 9.94 per cent of the total foreign
direct investment (FDI) approved. During the same period theFDI inflow for electrical equipment (including computer software
and electronics) was US$ 3.32 billion.
Procedure for approval
Once the investment in equity has been approved, the
import of capital goods, components and raw materials or
the engagement of foreign technicians for short duration
does not require any additional approvals.
Approval of Ministry of Home Affairs is not needed for hiring
foreign nationals holding valid employment visa.
Approval for setting up units in Export Processing Zones
(EPZs) is given by the Board of Approvals in the Ministry of
Commerce.
Approval for setting up export-oriented units (EOUs) outside
the zones is given by the Ministry of Industry.
Approvals for setting up Electronic Hardware Technology
Park (EHTP) and Software Technology Park (STP) units are
cleared by the Inter Ministerial Standing Committee (IMSC)
set-up under the Chairmanship of the Secretary, Department
of Information Technology.
Proposals involving foreign direct investment not covered
under the automatic route are considered by the Foreign
Investment Promotion Board (FIPB).
FDI/ Foreign Technology Collaboration Agreement
The government facilitates FDI and investment from Non-
Resident Indians (NRIs) including Overseas Corporate Bodies(OCBs), predominantly owned by them, to complement and
supplement domestic investment. Foreign technology induction is
encouraged through FDI and foreign technology collaboration
agreements. FDI and foreign technology collaborations are
approved through automatic route by the Reserve Bank of India
(RBI) or otherwise by FIPB.
Automatic FDI Approval
In pursuance of governments commitment to early
implementation of the second phase of the economic reforms
and with a view to further liberalising the FDI regime, all items
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and activities are placed under the automatic route for FDI/NRI and OCB
investment except:
All proposals that require an Industrial License include (i) items requiring an
Industrial Licence under the Industries (Development and Regulation) Act,
1951; (ii) more than 24 per cent foreign equity investment for units
manufacturing items reserved for small scale industries; and (ii) all items
which require an Industrial Licence in terms of the locational policy notified
by government under the New Industrial Policy of 1991.
All proposals in which the foreign collaborator has a previous venture/tie-
up in India.
All proposals relating to acquisition of shares in an existing Indian company
in favour of a Foreign/NRI/OCB investor.
All proposals falling outside notified sectoral policy/caps or sectors
for which FDI is not permitted and/or whenever any investor chooses
to make an application to the FIPB and not to avail of the automatic
route.
Automatic Approval by RBI for Foreign Technology CollaborationAgreements
RBI grants automatic permission for foreign technology agreement in all areasof electronics and IT provided:
Lump sum payment of the price of the technology
does not exceed US$2 million
Royalty payments do not exceed 5 per cent of domestic sales and 8 per
cent of exports. (The royalty rates are net of taxes).
The payments are subject to an overall ceiling of 8 per cent of total sales
over a period of 10 years from the date of agreement or over 7 years
period from the date of commencement of commercial production,
whichever is earlier. Application for investment under the automaticprocess is to be made to the RBI and approval is generally granted
within three weeks.
FIPB Approvals
The FDI/Foreign technology collaboration agreement proposals that do not
conform to the guidelines for automatic approval require government approval
through the FIPB. The Government has set up a special FIPB as a fast track
mechanism to invite and facilitate foreign investments in large projects in India,which are considered beneficial to the Indian economy but are not covered by
the automatic approval process and norms under which SIA is authorised to
grant investment approvals.
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Key Domestic and Foreign Players
Philips
Philips in India is a subsidiary of Royal Philips Electronics of
the Netherlands. It is promoted by Koninklijke Philips
Electronics N V.
Philips India Limited (PIL) is a leader in lighting, consumer
electronics, semiconductors, domestic appliances and personal
care with an unmatched range of products backed by superior
design and technology. PIL also has an excellent distribution and
after-sales service network. Philips has a plant each in Thane,
Pune, Loni-Kalbhor, Mohali and Baroda and three plants in
Kolkata. The revenue in the year 2004 was US$ 524 million
and the net profit was
US$ 22 million.
Videocon International Ltd.
In 1985, through a technical tie-up with Toshiba Corporation of
Japan, Videocon International
Limited launched Indias first world class Colour Television.Today, Videocon International Ltd. the flagship company of the
Videocon Group, is Indias
leading manufacturer of consumer electronic products.
Videocon is now a global player, the first Indian company to win
the prestigious CE approval for exporting its colour TV to
Europe. Videocon is now entering world market with its
operations in the Middle East, Europe, Indonesia and South
Africa.
It currently manufactures colour TVs, black & white TVs and
audio products - a range of home audio systems, stereo radio,
recorders and personal stereos. At its plant at Chitegaon and
Aurangabad it has also undertaken complete backward
integration to manufacture all critical and important components
of its products, such as electronic yuners, FBTs, ATDMs
and Deflection Yokes. The company had revenues of
US$ 873 million in 2004.
Mirc Electronics
MIRC makes and markets the Onida brand of products. Today,
apart from being a leading player in the CTV market, it also
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manufactures other household appliances including air-conditioners, washing
machines, DVDs, plasma television and home theatre systems. For office use,
Onida has also introduced state-of-the-art multi-media presentation products.
Its plant is located at Thane, Maharashtra. In the year 2005 the company hadrevenues of US$ 243 million and made a net profit of US$ 8 million.
HCL Infosystems Ltd.
HCL Infosystems manufactures and markets personal computers, PC servers
and RISC/UNIX servers. It offers IT consulting, technology integration services,
turnkey software development and functional consulting and implementation
services for Enterprise Resource Planning. The company made a net profit of
US$ 29 million with revenues of US$ 429 million in 2005.
Samsung
Samsung India Electronics Ltd., a subsidiary of the US$56 billion Samsung
Electronics Co. Ltd., has been operating in India since 1995. It is a leading
provider of high tech consumer electronics, home appliance, IT and telecom
products in the country. Samsung India has set up manufacturing facilities for
colour televisions, microwave ovens, washing machines, airconditioners, colour
monitors and more recently, refrigerators in the country. It has a plant in
Noida. The revenue in 2003 was US$ 715 million.
Solectron
Solectron Centum Electronics Limited is the leading Indian company offering
state of art solutions for Frequency Control Products (FCP), Electronic
Manufacturing Service (EMS) and Hybrid Micro Circuits (HMC). Solectron has
a manufacturing unit and design centre in Bangalore and a post manufacturing
centre in Mumbai. The EMS operation focuses primarily on the domestic
market. For the year 2005 the revenue
was US$ 10 million with a net profit of US$ 2 million.
Flextronics
Flextronics entered India in 2001 when it purchased a Motorola facility.
Flextronics maintains a Bangalore facility with 18,000 sq ft and 297 employees.
The products manufactured are engine management Ccrd, TV tuners,
set top box, energy meters, cellular phone, networking cards and
WLL wall sets.
Jabil Circuits
Jabil Circuit operates a 51,000 sq. ft. plant in Pimpri, which the provider took
over from Philips in 2002. The Pimpri plant manufactures TV analog monitor
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cards and certain audio products for Philips. All production
today is for the Indian market. In December 2004,
Jabil Circuit opened a 175,000-square-foot facility in
Ranjangaon that offers printed circuit board assembly,enclosure integration, and distribution and repair services,
along with in-region design service support. The site serves the
consumer, instrumentation, networking, peripherals and
telecommunications industries.
LG
LG Electronics India Pvt. Ltd. (LGEIL) is a wholly owned
subsidiary of LG Electronics, South Korea. It has a plant each
in Noida and Pune. Its products include TV, air-conditioner,refrigerator, washing machine, monitor, vacuum cleaner and
projector. LG India Pvt. Ltd. recorded a growth of 37 per cent
from the consumer electronics division, contributing to
46 per cent of the total turnover in 2003.
India will be a high growth market in the electronicssector in the medium term
Indias entire electronics market, worth $11.5 billion in 2004,
is expected to become one of the fast growing electronics
markets worldwide over the next several years. This market is
expected to grow to $40 billion by 2010 at an annual rate
of over 20 per cent. This growth will be assisted by trends
such as increase in contract manufacturing and increase in
EMS and ODM.
Contract manufacturing, an emerging trend, not only helps
hardware product companies de-risk their business model
but also achieve full utilisation of production facilities.
The market for EMS is projected to be US $ 163 billionby the year 2008, while the market for ODMs is projected
to be US$ 144 billion.
Many key players in the sector have definite plans for their
Indian operations
Samsung
Samsung plans to expand its manufacturing facility in India.
An additional investment of US$ 15 million is planned forexpanding CTV line capacity from 1.5 million units per annum
to 1.8 million units per annum. Samsung plans to invest over
US$ 25 million to expand its Bangalore based R&D centre.
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Canon India
Canon has set itself a revenue target of approximately US$ 150 million by
2007 with a leadership position across all product categories. Canon isbolstering its India marketing efforts with an investment of US$ 4 million in
advertising, market research, retail expansion, in-store branding and training
programmes.
Electrolux
Electrolux is in the process of sourcing components worth US$ 30 million
from Indian manufacturers. It plans to increase the value to US$ 300 million
by 2007.
LG
LG is also planning to invest over US$ 208 million in India in the next three
years to expand the business.
Philips
Philips expects to invest close to US$ 150 million in India over the next few
years.
The confidence expressed by the players in making such growth plans for India
reflects the potential of the Indian electronics sector. This sector is emerging
as one of the most attractive in India, and will be key to Indias emergence as
a global sourcing hub for products and services.
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CONTACT FOR INFORMATION
Information on the market and opportunities for investment in
the electronics sector in India can be obtained from theConfederation of Indian Industry (CII), which works with the
objective of creating a symbiotic interface between industry,
government and domestic and international investors.
Confederation of Indian Industry (CII)
6, Netaji Subhas Road
Kolkata 700 001
India
Tel: + 91 33 2231 5571-4,2261 0575(D)
Fax:+ 91 33 2231 5577
Email: [email protected]
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DISCLAIMER
This publication has been prepared for the India Brand Equity Foundation (IBEF).
All rights reserved. All copyright in this publication and related works is owned by IBEF.
The same may not be reproduced, wholly or in part in any material form (including
photocopying or storing it in any medium by electronic means and whether or not
transiently or incidentally to some other use of this publication), modified or in any
manner communicated to any third party except with the written approval of IBEF.
This publication is for information purposes only. While due care has been taken during
the compilation of this publication to ensure that the information is accurate to the best
of IBEFs knowledge and belief, the content is not to be construed in any manner
whatsoever as a substitute for professional advice.
IBEF neither recommends nor endorses any specific products or services that may have
been mentioned in this publication and nor does it assume any liability or responsibility
for the outcome of decisions taken as a result of any reliance placed on this publication.
IBEF shall in no way, be liable for any direct or indirect damages that may arise due
to any act or omission on the part of the user due to any reliance placed
or guidance taken from any portion of this publication.
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