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India Stuck With $300 Bln Electronics Bill

Discussion in 'World Economy' started by Zer0reZ, Jun 12, 2017.

  1. Zer0reZ

    Zer0reZ 2nd Lieutant FULL MEMBER

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    While India ponders cutting imports of gold and defense expenses, a study revealed New Delhi needs to control its spending on electronic goods, including smartphones, urgently. The sector will see demand grow to $400 billion by 2020, with a compound annual growth rate of 41% during 2017-2020.


    New Delhi (Sputnik) — A study conducted by industry group Assocham and NEC Technology estimates a $300 billion gap for imports due to slow domestic production growth, which is unable to meet demand.

    "The domestic production which is currently growing at a compound annual growth rate (CAGR) of 27% may touch $104 billion leaving a huge gap for import to the extent of $300 billion," study reads. The electronics industry valued at US$ 1.75 trillion is the largest and fastest growing industry in the world.

    Till now, the Indian government had focused on curbing gold and crude import which accounts for large chunks of the country's import bill. But government data suggests that electronic imports worth $4.4 billion outpaced gold import bill by a margin of $600 million. Last year, gold imports contracted 24% to $23 billion which is considered a major achievement of the government.

    Meanwhile, electronics imports picked up 2.6% at a time overall imports fell 3.7% in 11 months of the last financial year. As most of the items are imported from China, it will further deteriorate the country's trade deficit with China. Import of Chinese phones and accessories have witnessed more than a 20-fold jump to $14.3 billion in the last 12 years.

    "The domestic consumption of electronic hardware in 2014-15 was USD 63.6 billion against domestic production of $32.46 billion; out of which 58% was fulfilled with imports. With demonetization adding to the demand for POS devices and mobile phones, this demand is going to increase manifold," the study said.

    The liberal investment environment has provided some relief to the Indian government as investments in electronic manufacturing which was just $1.6 billion in June 2014 has increased exponentially to$19.2 billion in 2016. "Even though there are signs of promising growth, the local production of electronic products has to be increased significantly to meet the domestic demand. The industry suggests the government focus on both infrastructural as well as at the policy level, increased emphasis has to be provided for increasing the percentage of local component manufacturing in India," the study said
     
    Pundrick and Agent_47 like this.
  2. bharathp

    bharathp Developers Guild Developers -IT and R&D

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  3. Zer0reZ

    Zer0reZ 2nd Lieutant FULL MEMBER

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    Apple is there but it can't challenge Chinese phone market here in India. Indian brand should come up and challenge them, Micromax was doing great in Russia but no competition here what's so ever. I don't see how this going to change.
     
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  4. Agent_47

    Agent_47 Admin - Blog Staff Member MODERATOR

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    Apple is not the manufacturer, foxconn is.

    Foxconn Could Make India Its Next Manufacturing Base After China
     
  5. Pundrick

    Pundrick Lieutenant FULL MEMBER

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    It will take 4-5 years to close the gap to zero, and don't worry China is no longer provides the efficient factory for the Electronic manufacturing. India very soon will tap this space.
     
  6. Zer0reZ

    Zer0reZ 2nd Lieutant FULL MEMBER

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    Last edited: Jun 13, 2017
  7. Bloom 17

    Bloom 17 2nd Lieutant FULL MEMBER

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    i would like to disagree about india is taping into manufacturing. 90% of the manufacturing from china is going to Thailand and Bangladesh. Infact there is been a reduction in manufacturing over the years in India. India by nature of business is not being able to take in manufacturing. Smaller countries are absorbing all the middle scale electronic manufacturing industry while high level manufacturing position is still retained to china. We are no where close
     
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  8. Zer0reZ

    Zer0reZ 2nd Lieutant FULL MEMBER

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  9. Butter Chicken

    Butter Chicken Lieutenant FULL MEMBER

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    FTA with ASEAN is proving to be disastrous for India,they are flooding us with cheap electronics
     

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