“Global technology companies such as Samsung Electronics Co. (005930), Apple Inc. (AAPL)and Sony Corp. (6758) are poised to see surging sales in India as the country’s anemic tech manufacturing sector can’t fulfill booming demand for TVs and smartphones.
The world’s fastest-growing market for consumer electronics has few homegrown makers of flat-panel TVs and no producers of mobile phones or the semiconductors and displays used in the devices. Last year, the nation of 1.2 billion people spent $14.2 billion importing screens and smartphones, accounting for 90 percent of demand, government data show.
India’s technology manufacturers haven’t kept pace with itssoftware industry, which last year contributed 4.7 percent of the country’s $1.8 trillion gross domestic product. While the government is trying to support local output with subsidies, only foreign companies have the technology needed to benefit from incentives, according to India’s Department of Electronics andInformation Technology.
“India got carried away with the success of software,” said Suresh Khanna, secretary general of India’s Consumer Electronics and Appliances Manufacturers Association. “We never developed newer, smarter technologies and largely ignored hardware.”
Assuming India’s economy grows at a 6.5 percent annual rate, the foreigners may be fighting for share of a market totaling 27 million flat-screen TVs by 2017, up from about 7.2 million this year, Khanna said in an interview.
Just a quarter of the TVs sold in India are assembled locally, by companies including Samsung and LG (066570) Electronics Inc., and none of the core components are manufactured in the country, Khanna said. No smartphones are made in India, he said.