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Why is Electronic Imports Stewing India?

Concern rises, as a recent analyst said that the country needs to manufacture more goods within the country to reduce import costs and boost the economy, analysts say.

To clutch the growing demand for consumer electronics, India would need to import $300bn of electronic products by 2020.

This trend is known to take shift as growing disposable incomes balloon. Concern rises, as a recent analyst said that the country needs to manufacture more goods within the country to reduce import costs and boost the economy.

“While the government is taking steps to boost electronics production, one needs to see how quickly it ramps up – else given its size, which is now close to the oil deficit, it may be emerging as the ‘new oil’ for India,” said Kapil Gupta, an economist at Edelweiss, a financial services firm headquartered in Mumbai.

electronic products

Manufacturing of electronic good in India is still relatively low and imports of electronic items are a burden on the country’s trade deficit.

A study by lobby group Assocham reveals that India would need to import $300 billion of electronic products, including televisions and smartphones, by 2020 to meet demand, which is growing at a rate of more than 40 per cent a year.

The Indian government is focusing on developing India as a manufacturing hub through its ‘Make in India’ campaign, which has helped boost the production of smartphones in the country. But there is still much more that can be done.

The government has set a highly ambitious target of achieving net zero imports of electronics by boosting manufacturing. It has also increased import duties on some items including televisions and smartwatches in an effort to help the local industry.

But a major drawback is the lack of component manufacturing in India – something which India is eager to address.

“Hopefully in a couple of years’ time….. we are working hard towards this goal, we would be able to get most of the important sub-assemblies and the basic components also increasingly being manufactured in India,” said Ajay Prakash Sawhney, the secretary of the ministry of electronics and information technology, speaking at an electronics conference held in New Delhi at the end of May.

Recent Samsung and Xiaomi nod to expand in India and setup facility to cater Indian market have reposed the aforesaid ‘Make in India’.


Niloy Banerjee

A generic movie-buff, passionate and professional with print journalism, serving editorial verticals on Technical and B2B segments, crude rover and writer on business happenings, spare time playing physical and digital forms of games; a love with philosophy is perennial as trying to archive pebbles from the ocean of literature. Lastly, a connoisseur in making and eating palatable cuisines.

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