The demand for a wide range of consumer durable goods is growing as a result of the ongoing increase in disposable income and technological innovation in India. This in turn is fueling fierce competition among the various consumer durable brands that are available across the country. India is viewed by multinational organizations as one of the primary markets from which future growth is likely to originate.
During (April-June) 2024, electronics exports reach US$ 8.44 billion. With robust growth, India aims to achieve electronics manufacturing worth US$ 300 billion and electronics exports of US$ 120 billion by FY26.
By 2025, India's Consumer Electronics and Appliances Industry is predicted to be the fifth-largest in the world. The Indian Appliances and Consumer Electronics (ACE) market is predicted to nearly double in the next 3 years, reaching approximately Rs. 1.48 lakh crore (US$ 17.93 billion) by 2025. Smartphones have emerged as India's fourth-largest export category, experiencing a 42% growth to reach US$ 15.6 billion in FY24. The Indian appliances and consumer electronics industry stood at US$ 9.84 billion in 2021 and is expected to more than double to reach Rs. 1.48 lakh crore (US$ 21.18 billion) by 2025. Electronics hardware production in the country stood at US$ 87 billion in 2022. India's consumer electronics and home appliances market is set to grow by US$ 2.3 billion between 2022 and 2027, registering a CAGR of 1.31%. The Indian room air conditioner market is projected to reach Rs. 50,000 crore (US$ 5.6 billion) by FY29.
According to ICRA, the Indian room air conditioner market is expected to grow 20-25% YoY in FY25, reaching 12-12.5 million units, with 10-12% growth forecasted for FY26, driven by rising demand and favorable conditions.
FDI in the Appliances and Consumer Electronics (ACE) industry has nearly doubled to US$ 481 million by June 2022, up from US$ 198 million in 2021. Between April 2000-March 2024, electronic goods attracted FDI inflows of US$ 4.83 billion.
In the financial year (FY) 2022–23, India's exports of mobile phones doubled from Rs. 45,000 crore (US$ 5.45 billion) in 2021-22 to a whopping Rs. 90,000 crores (US$ 11.12 billion). India is the 2nd largest mobile manufacturer in the world.
In 2022-23 (April-November) the export of white goods are as follows:
- Refrigerators, freezers, and other refrigerating accounted for Rs. 116,223.32 lakh (US$ 140.97 million).
- Washing machines accounted for Rs. 35,819.59 lakh (US$ 43.33 million).
- Air conditioners accounted for Rs. 146,432.20 lakh (US$ 177.60 million).
- Electric lamps & Lighting fittings including tubes accounted for Rs. 160,750.62 lakh (US$ 194.97 million).
As of 2021, the refrigerator, washing machines and air conditioner market in India were estimated at around US$ 3.82 billion, US$ 8.43 billion, and US$ 3.84 billion, respectively. The market size of air conditioners is expected to grow to 165 lakh units by 2025 from 65 lakh units in 2019, while the refrigerators market size is expected to grow to 275 lakh units by 2025 from 145 lakh units in 2019.
The White Goods market is estimated to cross US$ 21 billion by 2025 expanding at a CAGR of 11%. Domestic manufacturing contributes nearly US$ 4.6 billion on average to this industry.
According to a report from Counterpoint's Make in India service, shipments of "Made-in-India" smartphones remained flat in 2023 to reach over 152 million units. In September 2022, monthly mobile phone exports from India crossed the US$ 1 billion mark for the first time ever. The smartphone market in India declined 9% YoY to reach shipments over 152 million units in 2022.
The dishwasher market in India is expected to surpass US$ 90 million by 2025-26, driven by rising demand from metro cities such as Mumbai, Hyderabad, Delhi, and Bangalore.
Refrigerator Market in India to increase to US$ 6.7 billion by FY26 from US$ 3.8 billion in FY21 at a CAGR of 9.5%.
Air Conditioner Market in India to increase to US$ 9.8 billion by FY26 from US$ 3.8 billion in FY21 at a CAGR of 20.8%.
India’s smartwatch shipments grew 50% YoY in FY23, driven by the rising penetration of smartwatches, proliferation of low-cost devices to target first-time users.
The flat panel television (LED, LCD, HD, and UHD) market in India was valued at US$ 9.05 billion in FY18 and is expected to reach US$ 16.24 billion by FY24, growing at a CAGR of 9.25%.
According to a report by EY Parthenon and CII, India's consumer durables sector is projected to grow at a CAGR of 11%, reaching Rs. 3 lakh crore (US$ 35.73 billion) by 2029.
India's consumer durables sector, currently contributing 0.6% to GDP, aims to boost its share by 1.5 times and become the fourth-largest market by 2027. With strong growth, it aspires to lead the global industry by 2030.
According to a report from Counterpoint’s “Make in India” initiatives, Mobile phone shipments rose during 2014-2022, registered a CAGR of 23% YoY to cross 2 billion cumulative units.
The smartphone market in India remained flat to reach shipments over 152 million units in 2023.
In the FY24, India is expected to export approximately 30% of its total smartphone production, as stated by the India Cellular and Electronics Association (ICEA).
According to a report by Counterpoint Research, India’s smart TV market grew by 74% YoY in the second quarter of 2022. Xiaomi stood as the leader with a 13% market share, followed by Samsung at 12%
The market also grew 28% in YoY in 2022 and the growth was primarily driven by strong shipments during the festive season in the third quarter, multiple new launches, discounts and promotions, and the demand for bigger screen-size TVs in the lower price tier.
According to a report by International Data Corporation (IDC), 4.5 million televisions were shipped to India in the first half of 2023. During the same time, Xiaomi continues to lead the TV market with a 14% share focusing more on its TV lineup, mainly the 5A and Redmi series.
ICRA reports a 53% YoY revenue growth for its sample set of three key RAC brands in Q1, driven by strong demand during the peak season. IT also anticipates a healthy 25% YoY revenue growth for the same brands in the current fiscal year.
According to a Morgan Stanley report, owing to a thriving economy and demographic shifts driving consumer demand, the markets for smartphones could triple to US$ 90 billion by 2032.
According to the Department for Promotion of Industry and Internal Trade, between April 2020-March 2021 (FY21), exports of electronic goods from India stood at US$ 11.1 billion. In May 2022, US$ 1.34 billion worth of electronic goods were exported.
Telangana’s homegrown company Resojet has entered into a memorandum of understanding with TCL for forging a joint venture and includes an investment of Rs. 225 crore (US$ 27.1 million). The joint venture will set up a consumer electronics manufacturing facility.
Apple is planning to increase its manufacturing production outside of China, with India and Vietnam both likely to benefit from this decision. Apple is currently in discussions with some of its suppliers about expanding production in India, and potentially even producing goods for export. Apple wants to move more than 18% of its iPhone production to India by 2025, up from 7% in 2023.
With over US$ 500 billion in FDI, progress is evident. Notably, the air conditioning sector is expected to become the largest in the world by 2040.
Electrical appliances maker V-Guard Industries has announced plans to invest in new manufacturing plants. Over the next 12 months, the company will open four additional factories: two in Hyderabad, one in Vapi, and one in Uttarakhand.
Lenovo has announced that it is considerably expanding its local manufacturing capabilities in India across product categories such as PCs, laptops and smartphones, to satisfy rising consumer demand.
TCL Group announced that it would start manufacturing handsets and TV display panels in Andhra Pradesh. The company plans to recruit 1,000 employees. This development was in line with the company’s plan to invest US$ 219 million to manufacture display modules in the country. In March 2023, Tirupati bags huge investments from TCL Group of Rs. 5,000 crore (US$ 606.44 million) for panel manufacturing.
In June 2023, Goat Brand Labs acquired 80% in Chumbak at a deal value of Rs. 100-120 crore (US$ 12.12- 14.55 million).
Vivo India has already invested Rs. 2,400 crore (US$ 291.09 million), and a further Rs. 1,100 crore (US$ 133.41 million) is expected to be invested by the end of 2023 to increase its manufacturing capacity and support the government's vision of making India a global export hub.
Under government initiatives, 42 companies were selected under the PLI Scheme for White Goods with a committed investment of Rs. 4,614 crore (US$ 580.6 million), expected to create additional direct employment for 44,000 people. In the 2nd round, 19 companies filed applications for the PLI Scheme for White Goods, with committed investments of Rs. 1,548 crore (US$ 194.79 million).
Flipkart signed an MoU with the Ministry of Rural Development of the Government of India (MoRD), for their ambitious Deendayal Antyodaya Yojana – National Rural Livelihood Mission (DAY-NRLM) programme, to empower local businesses and self-help groups (SHGs) by bringing them into the e-commerce fold.
The Indian government distributed approximately Rs. 79 crore (US$ 9.51 million) in fiscal incentives under the Production Linked Incentive (PLI) scheme for white goods during the last quarter of fiscal year 2024.
In July 2021, the government approved 14 companies under the production linked incentive (PLI) scheme for IT hardware. Over the next four years, these companies are expected to fuel total production of >US$ 21.64 billion. The government has also extended the production-linked incentive (PLI) scheme for large scale electronics manufacturing by a year (until FY26), giving a boost to the industry.
The National Policy on Electronics 2019 is targeting production of one billion mobile handsets valued at US$ 190 billion by 2025, out of which 600 million handsets valued at US$ 100 billion are likely to be exported.
The Indian appliance and consumer electronics (ACE) market is expected to increase at 9% CAGR to reach Rs. 3.15 trillion (US$ 48.37 billion) in 2022. The government anticipates that the Indian electronics manufacturing sector will reach Rs. 22.5 lakh crore (US$ 300 billion) by 2024–25.
References: Media Reports, Press Releases, Press Information Bureau (PIB), Boston Consulting Group, International Data Corporation.
