India has emerged as the largest market in the world for wearables, with Indian brands dominating this segment. The country’s electronics manufacturing sector experienced a remarkable 24% surge in revenue in the April-November period of 2023, reaching $18 billion. This growth has been driven by domestic adoption, as wearables become increasingly integrated into everyday life as essential health companions.
Indian brands are investing heavily in design and innovation, which has contributed to their dominance in the wearables market. This focus on design has created a big scope for exports in this segment, as Indian brands develop products that cater to both domestic and international markets.
The Indian government’s initiatives, such as “Make in India” and “Atmanirbhar Bharat,” have played a crucial role in developing the domestic market and attracting investments in the electronics manufacturing sector. These initiatives have created a strong impact on the industry, fostering a conducive environment for manufacturing and export growth.
While India’s electronics manufacturing sector has shown promising growth, there are challenges that need to be addressed. Building a robust supply chain, attracting high-tech talent, and bridging the digital divide are critical hurdles that need to be overcome. Additionally, focusing on component manufacturing, design, and innovation will be essential to increase margins and create a competitive edge in the global market.
Sunil Vachani, the newly appointed President of the industry body and Co-Founder and Executive Chairman of Dixon Technologies, expressed concerns about the industry’s recent subdued growth despite low penetration levels in key product categories compared to other markets. Affordability remains a crucial factor, and high taxation levels, exemplified by the 28% GST on air-conditioners, pose a significant challenge for industry members. Vachani emphasised the need to engage with the government and GST Council to gradually reduce GST on products. While post-Covid urban areas have shown increased demand, rural markets faced consumption challenges. Vachani is optimistic about the improvement in rural markets and certain product categories, such as semi-automatic washing machines, as inflation moderates.
The Indian electronics manufacturing industry, particularly in appliances and wearables, has immense export potential. With the continuous progress in AI and innovations, Indian brands have the opportunity to establish themselves as global players in the market. The sector is expected to reach $8 billion in manufacturing and exports by 2025-26.
RTM Watch’s Take
India’s electronics manufacturing industry, particularly in appliances and wearables, is poised for significant growth and has the potential to become an export hub. The dominance of Indian brands in the wearables market, coupled with government initiatives and investments in design and innovation, creates a favourable environment for export growth. However, addressing challenges such as supply chain robustness and talent acquisition will be crucial for sustained success. With the right strategies and support, India can establish itself as a global manufacturing and export powerhouse in the electronics sector.
