Like every other industrial sector in India, the Indian Electrical/Electronics Industry too is slowly emerging from out of its "protective cover". For far too long has Indian Industry remained shackled and consequently inward looking. Over the past fifty years there was no exposure to global players and competition, with the result that the Industry grew up in a sheltered environment, dependent on the Government for everything, from licenses to protection to tariffs. Each one of these interventions was aimed at securing protection for oneself and ensuring growth of one’s own organization at the cost of industry and the nation at large. Lack of global competition encouraged a "cost plus" approach, where every conceivable cost increase was passed on to the customer. There was thus no motivation to reduce costs.
With delicensing, decontrol and deregulation, Indian Industry has suddenly been exposed to global competition. Since last decade, India has witnessed what global players have achieved and what they are capable of achieving. We are becoming aware of competition on our turf. In this scenario, every company complains of increased competition, lower order books and shrinking margins. The Indian Electrical/Electronics Industry is of course further besieged by the fact that there is a dearth of business on account of lack of investment in the power infrastructure. Many organizations in this industry are looking overseas to develop the export markets owing to reduced demand at home.
At the outset, it must be stated that the reduced domestic demand is at best a temporary phenomenon. The power sector in India is bound to grow and this will undoubtedly boost demand from the Utilities, quite apart from the industrial demand which will continue to grow with increased industrial output. The poor financial health of the SEBs is however a damper that cannot be wished away in the short term. This will continue to plague corporates in the Electrical Industry, until the SEB restructuring and unbundling brings a turnaround in the medium term.
Segments of Electrical and Electronics Industry
The global electrical and electronics industry centres around various adjunct sectors. Few of them are Electronic Components, Computer & Office Equipments, Telecommunications, Consumer Electronics as well as Industrial Electronics.
Electronic Components Industry
This particular industry is engaged in designing, manufacturing, marketing, supporting, selling and distributing of broad range of electronic components such as bolts, clamps, fasteners, lighting, semi conductors, integrated circuits, microprocessors, cables and wires, switches, sensors, keyboards, sockets, sonar devices, test and inspection equipment etc. Worldwide market leaders electronic components are United States of America, European, Asian countries like Japan, China, India, Taiwan, and Hong Kong.
Future Prospects
The domestic market in India is itself large, and one must firstly satisfy this market with products that meet international quality standards. With increasing globalisation, every international player is now operating in India, providing goods and services complying with international quality. Once we deliver high quality products and services within the domestic market, accessing the international market for exports should not pose a serious challenge. The Electrical/Electronics Industry in India is growing to its full potential in the coming years and no doubt that India will soon come to be recognized for quality products and services which in turn, will bring this industry to a position of true leadership.
Indian electrical industry has grown because of government's thrust on it and also due to overall economic growth. It has also reached a stage where the industry has demonstrated its capabilities. The industry has seen a growth of 20% and should continue at the same level for the next few years.
Factors Governing the Growth of this Industry
Every industry thrives on some supporting factors. In this connection, there are few factors governing the growth of electrical and electronics industry:
- Research & development played an important role to the increased productivity and higher-value added electrical and electronics products.
- Foreign investments accelerated growth in production and export as well. To expand their business, foreign companies have done huge investment which lead developing countries in establishing production units.
- Global industries like Medical, Telecommunications, Industrial & Automotive industries have been cordially supported by electrical & electronics industry.
- Increase in income changed living standards of the common mass. As a result, it increased the demand of electronics especially consumer electronics products globally.
- Electric & Electrical industry is highly fragmented which comprises of many small and medium size enterprises resulting into a huge industry.
- Asia Pacific region is emerging as the most spinning place for the consumer electronics industry, as the markets remain still unbroached.
- Innovation has played importantly in this industry. It led to a consistent demand for newer and faster products and applications.
