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Indian Consumer Durables Industry Analysis

August, 2014

India is expected to become the fifth largest consumer durables market in the world by 2025. Also, the consumer electronics market is expected to increase to US$ 400 billion, while production could reach US$ 104 billion by 2016.

The expected market size of consumer durables in India by 2015 is US$ 12.5 billion. Urban markets account for about 65 per cent of total revenues in the consumer durables sector in the country. The rural and semi-urban markets are likely to contribute a majority of consumer sales as the rural consumer durables market is growing at the compound annual growth rate (CAGR) of 25 per cent.

The Government of India has increased liberalisation which has favoured foreign direct investments (FDI). Also, policies such as National Electronics Mission and digitisation of television and setting up of Electronic Hardware Technology Parks (EHTPs) is expected to boost the growth of this sector. This growth will be further supplemented by the reduction in Central Excise Duty from 12 per cent to 10 per cent.

The consumer durables market is anticipated to expand at a CAGR of 14.8 per cent to US$ 12.5 billion in FY15. Also, the demand from rural and semi-urban areas is projected to expand at a CAGR of 25 per cent to US$ 6.4 billion in FY15, with rural and semi-urban markets likely contributing majorly to consumer durables sales.

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