Indian Consumer Durables Industry Analysis

Indian appliance and consumer electronics (ACE) market reached Rs 2.05 lakh crore (US$ 31.48 billion) in 2017. It is expected to increase at a 9 per cent CAGR to reach Rs 3.15 lakh crore (US$ 48.37 billion) in 2022. Electronics hardware production in the country reached Rs 38,800 crore (US$ 5.55 billion) in FY18, growing at a CAGR of 26.7 per cent between FY14-18. Demand for electronics hardware in India is expected to reach US$ 400 billion by FY24 also the Draft National Policy (DNP) targets production of one billion mobile handsets by 2025.

By FY22, television industry in India is estimated to reached Rs 1,22,734 crore (US$ 17.56 billion).

There is a lot of scope for growth from rural markets with consumption expected to grow in these areas as penetration of brands increases. Overall consumer durable exports reached Rs 5,451.42 crore (US$ 0.78 billion) in 2017. Consumer electronics exports from India reached Rs 3,154.06 crore (US$ 451.29 million) in FY19. Also demand for durables like refrigerators as well as consumer electronic goods are likely to witness growing demand in the coming years in the rural markets as the government plans to invest significantly in rural electrification. The S&P BSE Consumer Durables Index has grown at 16 per cent CAGR between 2010-18. The consumer durables sector in India is expected to grow 8.5 per cent in 2018-19. Consumer durables index under the Index of Industrial Production (IIP) has grown 5.5 per cent year-on-year in 2018-19.

White goods industry in India is highly concentrated. In washing machines and refrigerators, top five players have more than 75 per cent market share, while in air conditioners and fans it is around 55-60 per cent. On the other hand, kitchen appliances segment is fragmented with top five players having 30-35 per cent market share. For the issuance of electronic certificates of origin (CoO), government launched the Common Digital Platform, which will be a single access point for all the exporters, all the FTAs/PTAs and for all agencies concerned.

Growing awareness, easier access, and changing lifestyles have been the key growth drivers for the consumer market. The Government of India's policies and regulatory frameworks such as relaxation of license rules and approval of 51 per cent foreign direct investment (FDI) in multi-brand and 100 per cent in single-brand retail are some of the major growth drivers for the consumer market. According to the Department for Promotion of Industry and Internal Trade, during April 2000–June 2019, FDI inflows into the electronics sector stood at US$ 2.45 billion. As per revised FDI policy, government has introduced certain bars for ecommerce platforms from selling on their websites and imposes a limit on how much one supplier can sell on their portal.