India Electronics and Semiconductor Association (IESA) releases two reports on domestic electronics manufacturing:
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India Electronics and Semiconductor Association (IESA) releases two reports on domestic electronics manufacturing:

India, January 13, 2014: India Electronic and Semiconductor Association (IESA), the premier trade body representing the Indian Electronic System Design and Manufacturing (ESDM) industry, released two studies today. The IESA-Frost & Sullivan Report analyses the growth & opportunity in the Indian ESDM market, while the ‘Disability identification study’ with Ernst & Young examines key macro issues that are impairing the growth of electronics manufacturing in the country.

The ESDM industry in India is expected to grow at a CAGR of 9.9% to reach US$94.2 billion by 2015. This is more than twice the growth rate of the global ESDM market and presents immense potential for the domestic market. Currently, 65% of demand for electronic products is met by imports in the country, and even the balance 35% which is manufactured in India is mainly “Low Value Added Manufacturing”. In this context, the two reports emphasize on developing an ecosystem for bridging the demand-supply gap and make concrete recommendations to the government to create a favourable environment for “High Value Added” electronics manufacturing facilities in India.

The ‘Disability identification study’ by Ernst & Young focuses on key issues across different electronic segments such as consumer electronics, IT systems and hardware and industrial electronics, and highlights key issues preventing the growth of indigenous manufacturing of electronics in India. The Frost & Sullivan report presents detailed product wise SWOT analysis of 25 high priority products that accounts for nearly 82% of the overall electronics consumption in India. It also has recommendations for bolstering an ecosystem to meet the demand of these 25 top products that are strategically important for the country. This report also captures 4 key components used in these 25 products, as the focus has to be for both Products as well as Component Manufacturing

Commenting on these reports, Mr. Sanjeev Keskar, Chairman, IESA said, “As per the government’s National Policy on Electronics we have a $100 billion investment target to meet by 2020. To put an entire ecosystem on track, certain fundamentals have to be set right. With the clear recommendations in this report, it’s time to adopt necessary changes to boost domestic product development and manufacturing. Ensuring speedy implementation of the new initiatives and taking corrective measures on certain key irritants will go a long way in building confidence ushering manufacturing investments into the country.” He added that “As this study corroborates, providing a favourable environment for developing the ecosystem in the country could eliminate disability costs associated with local manufacturing and lead to enormous development of the overall ecosystem. Focusing on the top 25 priority products along with key components could be a huge step forward in solving the problem.”

A summary of the issues as per Ernst and Young report and their impact:

Summary of recommendations

According to the Frost & Sullivan study, from the top 25 high priority electronic products that account for 82% of overall electronics consumption in India, the top 5 product categories alone account for 60% of the overall electronics consumption. Some of the high consuming electronic products identified are -

Power electronics/supply, Processor, LCD Display, Memory and PCB feature among the top 4 components contributing to the product Bill of Materials (BoM) across majority of the top 25 high priority products. According to the report, 69% of local consumption of the top 25 priority products are currently met through imports.

Strategic recommendations by Frost & Sullivan:

About IESA

The India Electronics & Semiconductor Association (IESA) is India’s premier trade body in the ESDM space. More information on IESA is available at www.iesaonline.org



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