The development of the Indian economy


The component market is very dynamic in India, grown in very significant manner also thanks to the liveliness of the industrial sector and then to the birth of new plants that have driven also the establishment of new component enterprises that are their suppliers.

Benno Scharf

The Indian market of electronic components can be considered small and big at the same time. It is an estimate that depends on points of view. It is small, if we compare it with the neighbouring China, Japan and South Korea; the situation changes, and on the contrary it shows remarkable sizes, if the terms of comparison become European Countries. As a matter of fact, its dimension roughly equals the German market’s, which represents the most relevant market in all Europe.
Today the economy of India highlights a strong development phase. The Gross Domestic Product grows with yearly rates that exceed 7%, while also the per head income rises by the average 5% percentage every year.  Despite this happy general situation, the scenario of single private citizens is much less positive: the average Indian citizen enjoys a yearly income that amounts to about one tenth of the Italian one.
A practical factor explains the high demand for components: in the Indian territory new companies are constantly rising at a rapid pace and then they need these elements for their machining operations. In the past, to satisfy the demand that comes from industry, components were generally imported from producing Countries; with the present increment of the presence of factories, on the contrary, it has raised the need of providing in more autonomous way for the productions of these components, to be able to provision local enterprises in simpler way. The national industry of components has then notably strengthened and in 2012 a historical surpass was registered: in the sector of components, in fact, the production exceeded import.
The table highlights the strong market dynamics: it is possible to verify, through a comparison of the data concerning 2011 and those regarding 2012, how in two years the global growth was by 26.3%.
As actually everywhere, semiconductors represent the vast majority of the total, that’s to say two thirds of the consumption. The incidence of passive components reaches around 21% while the remaining part is constituted by the so called “others”, which prove to be mostly electromechanical.
The application sectors where components find application are several and different: in 2012 the automotive industry absorbed 31% of electronic components, while 51% was represented by telecommunications, by information technology, by mobile phones and by office automation. The remaining 18% is subdivided between the production of armaments (very important in the Country) and various industries.

The Indian market is one of the most dynamic in the world in relative terms but, in comparison with the notable size of the Country, it is still relatively small and it shows immense development possibilities Therefore local sources agree that with strong probability, also in the next years, they will go on scoring the current high growth rates.

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Sources: Elcina, (Electronic Components Industries Association)  Isa (Indian Semiconductors Association), Gartner