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Indian Consumer Durables Industry Analysis

August, 2013

The consumer durables sector raked in revenues worth US$ 7.3 billion in FY12. Growth has been healthy over the years, recording a compounded annual growth rate (CAGR) of 10.8 per cent over FY03-12. The market is expected to double at a CAGR of 14.8 per cent to reach US$ 12.5 billion in FY15 from US$ 6.3 billion in FY10.

Demand for consumer durables in India has been growing on the back of rising incomes. This trend is set to continue even as other factors like rising rural incomes, increasing urbanisation, a growing middle class, and changing lifestyles changes aid demand growth in the sector. Consequently, industry analysts expect the sector to post a CAGR of 15 per cent over 2010-15. Increasing electrification of rural areas and wide usability of online sales would also aid growth in demand.

The Government of India (GOI) 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 light-emitting diode (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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