India is on the brink of transforming its consumer durables market, with predictions indicating it could become the fourth largest globally by 2027. The Confederation of Indian Industry (CII) has projected the market could balloon to ₹5 lakh crore (approximately $60 billion) by fiscal year 2030. B. Thiagarajan, the chairman of the CII National Committee on Consumer Electronics and Durables, emphasized the nation's rapid growth, noting, "India is already the fastest growing major market for consumer durables globally, and our momentum reflects the confidence investors have in our manufacturing capabilities."
Speaking at the recent CII Consumer Electronics & Durables Summit 2024, Thiagarajan outlined the pressing need for India to build a solid ecosystem focused on quality and standardization. He remarked, "For us to truly export Indian standards globally, we need to equip ourselves with the best practices and innovations available. Enhancing our reputation internationally is key to extending our reach." He believes the next decade will offer numerous opportunities not only for finished goods but also for developing indigenous components, which will be pivotal to scaling domestic manufacturing.
This sentiment was echoed across the conference, where industry leaders discussed the importance of creating favorable conditions for local manufacturers. Input from Godrej Appliances' Kamal Nandi underscored the necessity of protective tariffs to build confidence among vendors. "Without some protective barriers, it becomes challenging for local vendors to invest heavily," he stated. Nandi pointed to the fridge compressor sector, where against domestic demand of 14 million units, imports still occur due to inadequate local production capacity. With the market at 18 million, Nandi's points spotlight the inefficiencies within the domestic supply chain.
Sundaresan Narayanan, Managing Director of Carrier Airconditioning & Refrigeration Ltd, emphasized scalability as another pivotal concern for local manufacturers. "To genuinely localize high-tech components like compressors, we need to ramp up production to more viable scales. The stark difference compared to China's manufacturing capacity—over ten times ours—poses challenges," he pointed out, raising important questions about India's ability to compete effectively.
The talk on tariffs and protective measures isn’t without its challenges. Industry experts stressed the need for original equipment manufacturers (OEMs) to spearhead the development of local sourcing and supplier ecosystems to facilitate cost efficiency. "OEMs play a large role here, and we must assume responsibility for building this vendor ecosystem," Nandi asserted.
Thiagarajan championed the idea of combining local manufacturing capabilities with innovative advancements, especially through artificial intelligence (AI). He stated, "AI and other cutting-edge technologies are reshaping our sector. Investing more substantially here could trigger significant improvements across the board."
The government’s initiatives, such as the Production-Linked Incentive (PLI) scheme, have already begun contributing to the sector’s growth. The scheme aims to improve competitiveness and reduce dependency on imports, thereby aiming to fulfill Prime Minister Modi’s vision of making India self-reliant. Thiagarajan noted, "We've witnessed significant momentum, and with over $500 billion of foreign direct investment (FDI) bolstering our manufacturing aspirations, it’s clear we’re on the right track."
Through the promising winds at the summit, industry leaders seem optimistic. The air conditioning and refrigeration sector, for example, is on course to become the largest globally by 2040 according to current growth trajectories. This achievement would mark yet another milestone for India, emphasizing the viability of local manufacturing.
But all this optimism does come with caveats. Many believe the path to the envisioned consumer durables behemoth is fraught with challenges, particularly concerning the need for continuous research and development (R&D). Nandi and others have called for enhanced investment toward innovation to keep pace with international standards and competition.
Despite these challenges, there’s light at the end of the tunnel. With commitments to improve quality and by fostering standards, India aims to bolster consumer trust and loyalty. Thiagarajan noted the necessity for stringent quality controls. “Quality is directly related to consumer trust. We need to generate confidence among consumers about the reliability of Indian-made products," he stressed.
The government’s backing, combined with industry ambition, lays the groundwork for what could be one of the most transformative periods for the consumer durables industry. If these strategies take root, there is potential for India to not just meet domestic demands but also to emerge as a competitive player on the global stage, capable of producing goods of international standard.
Overall, the consumer durable sector's future appears bright, infused with excitement and potential, as industry experts and government leaders converge their visions to put India firmly on the global manufacturing map.
