Around 95 per cent of consumer electronics and appliances sold in India are produced locally, although dependence on China for components still ranges between 25-70 per cent which will be difficult to reduce overnight, according to industry body CEAMA.
Consumer Electronics and Appliances Manufacturers Association (CEAMA) said even before the call to boycott Chinese products, various companies had already started to look for alternative sources due to disruptions of supplies following the coronavirus-induced lockdown in China.
“We as an industry have done a lot of work (all brands) in creating capacity in the last two-three years by putting new plants to start manufacturing of finished products across categories. We are now in a very good position across all categories in the finished goods segment,” CEAMA President Kamal Nandi told PTI.
In air conditioner segment, around 30 per cent is still imported but this would have come down further had there been no lockdown as on streaming of new capacities which were being created got delayed, he said adding that “in the next season, it would be drastically low by all the organised players.”
Sharing the current scale of manufacturing in India in the sector, Nandi, who is also Godrej Appliance Business Head and Executive Vice President, said, “more than 95 per cent of products, which we sell in the country is produced in the country and the same is the case with Godrej Appliances.”
However, the dependence on China for components is still there and it varies from 25 per cent to 70 per cent from category to category. The least is washing machines and the highest is for the air conditioners. he said.
“Unless and until we develop an ecosystem for components, it is not possible to reduce dependence on China overnight. It will take time. We will have to find an alternative, which is available globally,” Nandi said.
Stating that there are alternatives in India, he said “but we would have to develop those alternatives… It will take time and we anticipate that it will take two years to develop an entire ecosystem of components in the country.”
The process has already started and the government is also encouraging investments and development of the manufacturing component ecosystem with schemes like Phased Manufacturing Program (PMP).
“I think the government and the industry together are already working under phased manufacturing programme to develop an ecosystem for manufacturing of components in this country and that should happen in a couple of years, he said.
Nandi also highlighted the fact that the industry was already on the look out for alternative source much before the India-China border clashes that raised anti-Chinese sentiments in India. “Forget what is happening now. Even in the first quarter (January-March) when China was going through lockdown, we all had experienced component shortages from China and that triggered the strategy for China plus one (China+1),” he said.
Because of no supply from China, the entire industry looked for ‘China+1’ policy from countries like Thailand, Vietnam and Korea as alternative destinations for components, he added. The current boycott Chinese products has led to an increased demand for products from other non-Chinese companies.
“For mobile phones we have seen an unprecedented growth in the past few days, going forward we plan to launch six new handsets across price segments. We are also strengthening our manufacturing capacity in India. We also plan to launch robust campaigns to highlight Make In India line up,” LG Electronics India Business Head- Mobile Communications Advait Vaidya said.
Kitchen appliances maker TTK Prestige has said hat the company would stop sourcing from China due to the present standoff between the two countries. “We have been reducing this dependence over the last few years, right from the time the Doklam incident had happened. The present standoff has triggered us to come to this hard stop for imports from China, and we would also like to respond to the Prime ministers call for ‘Atmanirbhar Bharat’ in our small way as well,” TTK Prestige Managing Director Chandru Kalro said.
He further said that “we have taken the decision to stop all finished goods sourcing and are working hard to also develop the component ecosystem in India itself”. TTK Prestige currently imports around 10 per cent of its requirements from China for the Indian market. “Our ultimate goal is to ensure that less than 5 per cent of our total portfolio will be sourced from outside India,” Kalro said. When reached out, Voltas India and Samsung did not comment.