Advantage India
Growing
Demand
* The Indian room air conditioner market is projected to reach Rs. 50,000 crore (US$ 5.6 billion) by FY29.
* Due to a flourishing economy and changing demographics, India's smartphone market is projected to grow to US$ 90 billion by 2032.
* The headset market revenue in India is projected to reach US$ 77 million by 2027 at a CAGR of 4.7%, driven by rising adoption of wireless headsets among consumers.
Opportunities
* India’s wearable market registered another record quarter, shipping 134 million units in CY 2023, a growth of 34 YoY.
* During FY25 (April-December), electronics exports reached Rs. 2,25,869 crore (US$ 26.1 billion).
* With robust growth, India aims to achieve electronics manufacturing worth US$ 300 billion in electronics exports of US$ 120 billion by FY26.
Policy
Support
* 100% FDI allowed in the electronics hardware-manufacturing.
* The PLI scheme for White Goods (ACs and LED lights) spanning FY 2021-22 to FY 2028-29 approves 64 applicants with a committed investment of US$ 814 million (Rs. 6,766 crore).
* In March 2023, Samsung invested in setting up smart manufacturing capabilities at its mobile phone plant in Noida.
Increasing
Investments
* Between April 2000-September 2024, electronic goods attracted FDI inflows of Rs. 39,416 crore (US$ 5.67 billion).
* Sector contributes approximately 0.6% in 2024 to the nation's GDP and is expected to grow at a CAGR of around 11%, aiming for a market size of Rs. 3 lakh crore (US$ 34.5 billion) by 2029.
Introduction
The Indian consumer durables market is broadly segregated into urban and rural markets and is attracting marketers from across the world. The sector comprises a huge middle class, a relatively large affluent class, and a small poor class. The sector includes consumer electricals such as fans, kitchen and cooking appliances, lighting devices, as well as white goods such as washing machines, televisions, refrigerators, and air conditioners.
The market share in the consumer durables industry is moving from the unorganised to the organised sector. According to estimates, 30% of the total market is still unorganised, which provides listed Indian players with a significant opportunity to further increase their market share going forward. Artificial intelligence and manufacturing automation will be important future trends as consumer awareness increases regarding technology advancements and their applications across multiple sectors. In order to increase the production efficiency of various consumer durables, Industry 4.0 will stimulate investments in R&D, technology infrastructure, and manufacturing processes.
Refrigerator market in India is valued at Rs. 46,732 crore (US$ 5.4 billion) in 2024 and is expected to reach Rs. 1,04,713 crore (US$ 12.1 billion) by 2033 at a CAGR of 9.37%.
Global corporations view India as one of the key markets from where future growth is likely to emerge.
The growth in India’s consumer market would be primarily driven by a favorable population composition and increasing disposable income. During FY25 (April-December), electronics exports reached Rs. 2,25,869 crore (US$ 26.1 billion). With robust growth, India aims to achieve electronics manufacturing worth US$ 300 billion in electronics exports of US$ 120 billion by FY26.
Market Size
Indian Appliance and Consumer Electronics Industry market size is expected to nearly double in the next 3 years, reaching approximately Rs. 1.48 lakh crore (US$ 17.93 billion) by 2025.
Indian appliances and consumer electronics industry stood at US$ 9.09 billion in 2022 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 smartphone market is expected to grow by 3% YoY in 2025, fuelled by improving consumer sentiment and government efforts to reduce unemployment.
The total number of active DTH subscribers rose from 65.25 million in the March 2023 quarter to 65.50 million in the June 2023 quarter.
The recent tariff hike by India’s Direct-To-Home (DTH) operators is likely to help them log a 6-8% growth in revenue to Rs. 19,500 crore (US$ 2.34 billion) in fiscal 2024.
The Indian room air conditioner market is projected to reach Rs. 50,000 crore (US$ 5.6 billion) by FY29.
Indian washing appliances current market size is US$ 3.76 billion which is expected to grow US$ 5.43 billion by 2029 with CAGR of 7.65%.
In first quarter of 2024, Smartphone shipments from India increased by 8% YoY reaching 35.3 million units, and value of the shipments is up by 18% YoY. It was primarily driven by healthy inventory levels and the low base of first quarter of 2023.
India’s Exports for Refrigerators, Air Conditioners, LEDs and Washing Machines amounted to Rs. 4,732.54 crore (US$ 571 million) in FY21. 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%.
India’s Imports for Refrigerators, Air Conditioners, LEDs and Washing Machines amounted to US$ 1.74 billion (Rs. 14,421.40 crore) in FY21. 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%.
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.
Investments
FDI in the Computer Software & Hardware industry has been second highest Rs. 7.53.894 crore (US$ 107.1 billion) for FY25 (until September).
Following are some recent investments and developments in the Indian consumer durables sector:
- Foxconn announced Rs. 1,200 crore (US$ 144 million) investment aims to enhance India’s manufacturing capabilities.
- Vivo is set to commence production at its Rs. 3,500 crore (US$ 420 million) facility in Greater Noida.
- Foxconn plans to invest up to Rs. 1200 crore (US$ 144 million) to expand a factory and come up on company-owned land.
- Telangana’s homegrown company Resojet has entered 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.
- In FY23, India's exports of mobile phones doubled from Rs. 45,000 crore (US$ 5.45 billion) in FY22 to Rs. 90,000 crore (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).
- In 2022-23, India produced wearables such as earphones and smartwatches worth Rs. 8,000 crore (US$ 970.31 million).
- According to 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.
- The advertisement income recorded by FM Radio operators for the quarter ending 31st December 2022 in respect of 388 private FM Radio stations is Rs. 427.18 crore (US$ 51.8 million). 408 Community Radio stations are operational as of December 31, 2022.
- 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 US$ 12.12-14.55 million (Rs. 100-120 crore).
- Vivo India already invested Rs. 2,400 crore (US$ 291.09 million), and a further US$ 133.41 million (Rs. 1,100 crore) 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.
- India’s wearable market registered another record quarter, shipping 37.2 million units in the third quarter (July-September) of 2022, a growth of 56.4% YoY.
- According to a report from Counterpoint's Make in India service, shipments of "Made-in-India" smartphones increased 16% YoY in the second quarter of 2022 to reach over 44 million units.
- 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%.
- As per TAM's latest AdEx report, television advertising for the durables sector grew 2.5 times during January-May 2022, as compared to the same period in 2021. The sector grew 23% YoY in January-May 2022.
- 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.
- In FY23, Godrej Appliances announced plans to invest Rs. 200 crore (US$ 25.11 million) in the capacity expansion of its premium range.
Government Initiatives
- In October 2024, the third round of the PLI Scheme for white goods specifically air conditioners and LED lights, received 38 submissions, reflecting a net committed investment of Rs. 4,121 crore (US$ 476.2 million).
- The PLI Scheme for White Goods (ACs and LED lights) spanning FY 2021-22 to FY 2028-29 approves 64 applicants with a committed investment of US$ 814 million (Rs. 6,766 crore).
- The Ministry of Consumer Affairs has asked top consumer durables companies (such as LG, Samsung, Havells, etc.) to share data to create a common repository of information on their service centres and repair policy in an effort to protect customers' rights to repair and maintain home appliances.
- In November 2021, 42 companies were selected under the PLI Scheme for White Goods with a committed investment of Rs. 4,614 crore (US$ 580.6 million), which is expected to create additional direct employment for 44,000 people.
- In April 2022, 19 companies filed applications for the PLI Scheme for White Goods in the 2nd round of applications, with committed investments of Rs. 1,548 crore (US$ 194.79 million).
- As part of the PLI scheme, 61 companies have established component manufacturing facilities in 111 locations throughout 14 states and UTs, creating jobs across India.
- In November 2021, 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.
- In March 2022, 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 Rs. 1,60,000 crore (US$ 19.23 billion).
- In June 2021, the government extended the Production-Linked Incentive (PLI) scheme for large scale electronics manufacturing by a year (until FY26), giving a boost to the industry.
- The Indian government has been encouraging consumer durable brands in India to ‘Make in India’, thereby expecting they should be self-reliant for the future; consumers too are showing an affinity towards homegrown products.
- 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 Government of India has allowed 100% FDI under the automatic route in electronics systems design and manufacturing sector. FDI into single brand retail has been increased from 51% to 100%; the government is planning to hike FDI limit in multi-brand retail to 51%.
Road Ahead
According to several consumer durable businesses, rural India presents the next significant growth potential for the industry, driven by increased penetration. The government's effort to electrify rural areas has improved power supply during the past few years in tier 3/4 towns and villages, paving the way for the use of electrical products.
According to FICCI, India’s TV production is expected to reach US$ 10.22 billion by FY26 at a CAGR of 20%. The headset market revenue in India is projected to reach US$ 77 million by 2027 at a CAGR of 4.7%, driven by rising adoption of wireless headsets among consumers. 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. According to India Cellular & Electronics Association (ICEA), India has the potential to achieve a value of US$ 100 billion in manufacturing of laptops and tablets by 2025.
The Indian mobile phone market is predicted to generate Rs. 2.4 trillion (US$ 29.38 billion) in revenue by FY26.
References: Media Reports, Press Releases, Press Information Bureau (PIB), Boston Consulting Group, International Data Corporation
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