The Indian consumer electronics sector is a major contributor to the country’s economy, generating employment and driving GDP growth. As India strives to become a global leader in consumer electronics manufacturing, the upcoming Union Budget is of great significance. With the ambitious goal of transforming into a $300 billion electronics industry, stakeholders are hoping for measures that will boost the sector’s growth trajectory and address key challenges.
Developing robust technological 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 promote innovation and competitiveness on a global scale.
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Localization of raw materials and components is another crucial aspect. By reducing dependency on imports, especially from countries like China, India can strengthen its economic stability and manufacturing resilience. The government should encourage the development of local supply chains and support industries that produce essential components. This move will not only improve the domestic manufacturing ecosystem but also help strengthen foreign reserves and ensure a steady supply of critical materials.
The announcement of the India-Middle East-Europe Economic Corridor in the previous Budget hinted at significant export opportunities for the Indian consumer electronics sector. However, to fully benefit from this corridor and explore additional export opportunities, the upcoming Budget must introduce measures that go beyond this initiative. In line with the country’s development goals, the Budget should focus on improving trade agreements, streamlining export procedures and providing financial incentives to exporters. The materialization of Free Trade Agreements (FTAs) with key markets can open up new opportunities for the industry.
Currently, televisions larger than 32 inches are classified as luxury goods and are subject to a GST of 28%. Industry stakeholders see this classification and the high tax rate as unfair, as televisions are no longer considered luxury items but essential household products. By revising the GST rates for televisions and other consumer electronics, these products can be made more affordable to a larger section of the population, thereby boosting domestic sales and encouraging local manufacturing.
Moreover, 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 if 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 that can adapt to the demands of Industry 4.0. The government should prioritize initiatives aimed at upskilling and reskilling the existing workforce, and integrating advanced manufacturing and digital technologies into education and training systems. By making the workforce industry-ready, India can ensure sustainable growth and maintain its competitive edge in the global marketplace.
The future of the consumer electronics industry in India looks promising, with several developments pointing to a positive trajectory. The government’s support for the “Make in India” initiative and the green signal for new manufacturing facilities have given the industry a remarkable boost. Continued support in the form of policy changes, financial incentives and infrastructure development will be essential to maintain 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 live up to these expectations and help India achieve its ambitious goals.
Ankit Maini, Managing Director – Veira Group
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