Home appliance and consumer electronics market likely to grow by 10%

The domestic home appliance and consumer electronics market is expected to grow by 10 per cent on a compounded annual growth rate till 2022, according to latest PwC report, with the country having the potential to be one of fastest growing markets in the world in terms of consumption, manufacturing and job creation.

The report said factors like emerging middle class, rising disposable incomes and progressive government reforms such as digital India and make in India will drive growth.

However, a key challenge is the low domestic cumulative value addition in the production cycle, which is less than 40% for most new age products and 7% for smartphones -- far lower than the global average. This is attributed to limited domestic component ecosystem, high cost of finance and power, and inefficient infrastructure.

The report recommends creating large scale demand by easing the tax structure and encouraging financing firms to provide easy consumer finance. It suggests domestic manufacturing cost should be competive by lowering cost of capital, creating a phased manufacturing plan for these products like mobile phones in which incentives will be linked to domestic value addition in India and ensuring low sourcing costs through development of a good supplier ecosystem.

PwC says if these are adopted, the Indian appliances and consumer electronics industry can aim to increase value addition by two to three times by 2022. The growing domestic demand and the rising labor costs in alternative markets can lead to an increase in the number of jobs in this sector by almost two times.