The electronics and appliances industry is projected to reach $40 billion by 2012 with a CAGR of 11 per cent, provided a dedicated department for electronics and appliances is created by the government for promoting growth in the domestic market and attracting investments from global players.
According to a study by Ernst & Young for commerce and industry body ASSOCHAM released late last week the current market size of the electronics and appliances industry for 2008-09 is estimated at $ 27.38 billion.
The industry has grown 7.1 per cent over previous year in rupees terms. Due to ruppee devaluation by nearly 25 per cent in 2008-09, this reflects a negative growth in terms of the dollar. However, the CAGR of electronics and appliances has been 20.3 per cent between 2004 and 2008 in rupee terms.
The paper highlights that the two objectives of promoting the domestic market and export market should be worked upon simultaneously to increase production share of world market.
The study has identified the key challenges in achieving this, and supported with initiatives both from government and industry. These include exploring possibilities for a dedicated department for electronics and appliances as also establishment of a master plan for electronics and appliances sector. In addition, it emphasises strengthening of investment promotion activities through research and development and signing of Free Trade Agreements.
It has recommended a 25-year master plan with a long-term vision for electronics and appliances industry, deriving strategic options available to attract manufacturing facilities in India. The proposed master plan should be on lines of those in Vietnam and China, which revolutionised electronics and appliances industry in these two countries.