After the first iPhone, then smart TV and microwave oven, India is eyeing the production of electronics items that were going to import earlier. This means that India has made up its mind to completely destroy the electronic market of China. Because of which ‘Dragon’ is sleepy. It is reported that India is now increasing manufacturing of specific electronic products such as robotic vacuum cleaner, coffee maker, built-in refrigerator and air fryer, which was fully imported till recently.
According to industry officials, this development is due to the increasing list of electronic products by the government, whose factories require certification under the Quality Control Order (QCO) of the Bureau of Indian Standards (BIS). The purpose of which is to control imports from China and other places and promote local production. Most of these products have come under QCO in the last eight to nine months. Till recently, most consumer product companies argued that the market of these categories is so small that local production has no meaning.
Local production promoted
Dixon Technologies MD Atul Lal said in the ET report that BIS Norms has been very important, as more and more brands – including premium brands – despite small market sizes, are exploring the possibility of local production for small components. This is a good business opportunity. Earlier this week, Dixon signed an agreement with Eureka Forbes to create a robotic vacuum cleaner, which has a market size of about Rs 700 crore. Dixon is the largest domestic electronics contract maker company.
Europe’s company planted plong
European company Libher has set up a plant for a built-in customized refrigerator in Aurangabad, which will start production in April, while domestically has its annual sales of 14,000-15,000 units. Kapil Aggarwal, MD (Sales) of Libher Appliances in India, said that from this year the examination of BIS Norms for the refrigerator is working as a warning to set up a factory at the local level, which has further strengthened from the wave of premiization. We were importing from Germany, but getting factory certification is a difficult process. We also believe that in five years the market will increase to 1 lakh units. He said that therefore, there will be commercial benefits from the local plant and this will reduce the time taken in the import.
Local sourcing priority
The annual report by Crumpton Greaves Consumer Electricals states that it will give priority to local source in this financial year. Havels India said in its annual report that it would further promote the localization of products to reduce dependence on imports, which was about 8 per cent of its total source in the last financial year, and has reduced by about 15 per cent of the total sourcing in FY 2024. According to Ajay Singhania, MD, Epack Durable, the Ex -Cequet of QCO has opened more attractive categories.
While the business of more mature catty garijs like Mixer Grinder has been either stable or is growing at a slight rate of 3-4 per cent annually. He said that the occasion included 72 categories, such as Air Fire, Electric Cattle, and Hair Dryers, most of which were perfectly imported earlier. He told analysts last month that we are playing a leading role in doing localization of these categories and meeting the needs of most major customers.
How much is the market size
Before the QCO was implemented, many companies imported a huge amount of these products in the last few months. Industry officials said that the market size for standalone categories may be small, but overall it is a commercial opportunity of more than Rs 12,000-13,000 crore. The market size of air-conditioner alone is more than Rs 40,000 crore and the market of smartphols is more than Rs 1.5 lakh crore.
Vikas Gupta, MD (Operation) of PG Electroplast, said that seven-eight years ago started production of small equipment, but at that time it had to be closed due to the opportunity being very low. He said that but with BIS Norms, now we are considering it again because many brands are contacting us.
In the last few years, the government has expanded compulsory BIS QCO certification to products like AC, washing machine, refrigerator, ceiling fans, plugs, switches and cables, and very few foreign factories have received BIS certification.