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  3. ESDM industry to grow at a CAGR of 16- 23% by 2020: IESA

ESDM industry to grow at a CAGR of 16- 23% by 2020: IESA

22 Feb 2017 Evaluate

Aided by sector-specific drivers and government’s growth oriented reforms, Indian Electronic System Design and Manufacturing (ESDM) industry is expected to grow at a Compound Annual Growth Rate (CAGR) of 16-23 per cent to reach $ 171-228 billion by 2020. As per a joint report of the India Electronics and Semiconductor Association (IESA) and global services firm Ernst & Young (EY) in 2015, India's ESDM industry is sized at $ 82 billion, growing at a CAGR of eight per cent from 2013. By 2016-17 the sector will become a 100 billion plus opportunity. The report stated that the robust growth of India's electronics industry is primarily driven by huge domestic demand for products that can be attributed to a multitude of factors, including a growing middle class, rising disposable incomes and favourable duty structures.

IESA, the trade body representing the Indian ESDM industry in the country, in its report noted that domestic manufacturing of electronic products market is sized at $61.8 billion, growing at a CAGR of 10 per cent over the past two years and that the sector was expected to grow at a CAGR of 15-19 per cent to reach $123-150 billion by 2020 and is expected to increase further over the next five years from 17 per cent annual growth, while the Electronic Manufacturing Services segment is estimated to grow 42-68 per cent over the next five years to $ 6-13.2 billion by 2020.

It also said that electronic components market is estimated to grow at a CAGR of 22-33 per cent to reach $ 36.6-56.5 billion and design services revenue is forecast to reach $ 23.5-29.2 billion by 2020 at a CAGR of 13-18 per cent. To forecast industry outlook, apart from sector-specific drivers the report has taken several parameters in consideration such as overall  Gross Domestic Product (GDP) growth, currency movement, inflation, existing trade agreements, consumer sentiments, potential government consumption, existing government policies, investments, manufacturing entities, and type of value addition in India.

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