Implementation of GST and low penetration of electronic products in the country will fuel the growth of domestic electrical equipment market  The domestic electrical equipment market is poised for growth mainly driven by completion of several power and electrical projects as well as growth in domestic electric appliance and IT industry despite global economic recession, which impeded growth of virtually every industry. According to data released by the Indian Electrical and Electronics Manufacturers’ Association (IEEMA), the sector is poised for 15% growth in 2010-11. In a recent survey conducted by Machinist360.com, a whopping 100% of the respondents feel that the electric equipment industry is poised for growth.Implementation of GST favouring industry growth
According to Suresh Panchal, proprietor of Atlas Plastic, a mid-sized manufacturer of electronic equipment in Ahmedabad, “With goods and service tax (GST) likely to become operational next year, it will hugely benefit the sector as it will streamline movement of goods via single tax structure replacing multiple tax system. This will result in huge savings for industry players, which can be ploughed back in capacity expansion and for rolling out better quality products.” It is to be noted that under the GST regime, tax will be charged only at the point of supply of products, which will also benefit consumers.
The industry is also expected to grow riding on high demand for cost-effective equipment from Western markets particularly from the US. In this context, Kavita Sharma, director of Hightech Equipment, a mid-sized manufacturer of electronic equipment in Patna, said, “The penetration level of electronic products in India is still very low as compared to other countries. However, with India rapidly evolving as one of the fastest economies in the world, coupled with rise in per capita income, the demand for electronic products such as computers, televisions, refrigerators etc is expected to witness a significant rise in the coming days, which will propel the sector’s growth.”
With foreign firms collaborating with Indian counterparts owing to low manufacturing costs and availability of cheap labour in the country, the road ahead looks bright for Indian electronic equipment makers.
Arup Choudhury |
