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Despite economic pressures, ISA bullish about growth of Indian ESDM industry

isaSunday, 11 November 2012: The report indicates that the Indian ESDM Industry is on a growth trajectory of 9.9 per cent CAGR — from USD 64.6 billion in 2011 to a forecasted USD 94.2 billion in 2015.

The global economic pressures are increasingly becoming a cause of concern for the Indian electronics industry, but the Indian Semiconductor Association (ISA) is still bullish about the growth and is hopeful that India would be among the few economies that can ‘weather the harsh conditions prevailing in the global environment’.

By Diksha P Gupta

ISA released its 6th ISA – Frost & Sullivan Report on the Indian Electronics Systems Design and Manufacturing (ESDM) Market (2011-2015) at an event in Bengaluru. The report was released in the presence of members and office bearers of the ISA including Dr. Satya Gupta, chairman, Sanjeev Keskar, vice chairman, Dr. Pradip Dutta, immediate past chairman, PVG Menon, president and Ashok Chandak, executive council member, who was the convener of this effort.

The report indicates that the Indian ESDM Industry is on a growth trajectory of 9.9 per cent CAGR — from USD 64.6 billion in 2011 to a forecasted USD 94.2 billion in 2015. This has buoyed the spirit of the industry, which is now looking forward to healthy growth during this period.

The report talks about the growth of electronics product market highlighting the importance of imports. It reads, “Although the electronics product market is growing a very fast pace, ironically most of the demand is being fulfilled by imports. The growth potential of the services component will be determined to a great extent by India’s ability to undertake higher value-add activities and cost competitiveness. Resolute focus on the ESDM industry and favourable policies to incentivise investment, adoption of new technologies, catalysing, innovation and entrepreneurship, enhancement of skills and addressing the disability cost of developing ESDM products domestically are the key ingredients to elevating India to a leading player in the global arena.”

According to ISA, the ESDM industry in India comprises the following four key segments including: Electronic Products, Electronic Components, Semiconductor Design Services, and Electronics Manufacturing Services (EMS).

The electronic body highlights that the market for electronic products comprises domestic demand and products manufactured for exports. This market is expected to grow from $52.4 billion in 2011 to $74.6 billion in 2015. Declining prices and increasing affordability are anticipated to propel domestic demand.

While the report recognises the mettle proven by the Indian ESDM industry against ‘immense adversities’, it highlights that “the Indian ESDM industry has not been able to realise its potential for a long time and has missed the opportunity to emerge as the world leader while smaller economies went on to march ahead. With so much time lost, an urgent action plan is required to effect a paradigm shift. Stakeholders – the industry and the government – have to exhibit the highest level of commitment to bring about change immediately.”

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