While the depreciation of rupee is known to cause strains on the imports of petroleum and bullion, the impact on the electronics market is often forgotten.

With Onam festival season around the corner, it is shopping time for Keralites and electronics items figure prominently in the list of household articles in demand. As the consumer goods marketing companies sell products worth crores of rupees in the State, the deals incur heavy outflow of foreign exchange as majority of the electronic components are imported.

The Indian electronics hardware production constitutes only around 1.31 per cent of the global production. In the absence of a major thrust on the electronics manufacturing scenario, electronics import may far exceed oil imports by 2020, according to the Department of Electronics and Information Technology. Electronics components form a significant part of most of the imported machines and equipment such as automobiles, health equipment and defence armaments, apart from household items.

According to Union government accounts, electronics Industry is the largest and fastest growing manufacturing industry in the world. The industry, with an outlay of $1.75 trillion, is expected to reach $ 2.4 trillion by 2020. The demand in the Indian market, which was $ 45 billion in 2008-09, is expected to reach $ 400 billion by 2020.

Kerala, netting high remittances from the large non-resident Indians’ presence, has been witnessing significant increase in the sales of electronic consumer goods year after year during the Onam season. It would mean that more of foreign exchange will depart the shores of the country this year.

The domestic production of electronic goods in the country in 2008-09 was about $20 billion. However, the actual value-addition in the domestically produced electronic product is very low, ranging between 5 to 10 per cent in most cases.


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