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Indian Consumer Durables Industry Analysis

April, 2014

India is expected to become the fifth largest consumer durable market in the world; the market is expected to reach US$ 12.5 billion by FY 15 from US$ 7.3 billion in FY 12.

Urban markets account for the major share (65 per cent) of total revenues in the consumer durables sector in India. Demand in urban markets is likely to increase for non-essential products such as LED TVs, laptops, split ACs and beauty and wellness products. In rural markets, durables like refrigerators as well as consumer electronic goods are likely to witness growing demand in the coming years as the Government of India plans to invest significantly in rural electrification.

Demand growth is likely to accelerate with rising disposable incomes and easy access to credit. Increasing electrification of rural areas and wide usability of online sales would also aid growth in demand.

The Government of India has allowed 100 per cent foreign direct investment (FDI) in electronics hardware-manufacturing under the automatic route. The government has also reduced the excise duty to 6 per cent on LED lamps and LEDs required for manufacture of such lamps. Further, Electronic Hardware Technology Park (EHTP) Scheme provides benefits, such as duty waivers and tax incentives, to companies which replace certain imports with local manufacturing.

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