Consumer Durable market in India

Indian consumer durables market is broadly segregated into urban and rural
markets and is attracting marketers from across the world. The sector
comprises of a huge middle class, relatively large affluent class and a small
economically disadvantaged class. Global corporations view India as one of the
key markets from where future growth is likely to emerge. The growth in
India’s consumer market would be primarily driven by a favourable population
composition and increasing disposable income.

Per capita GDP of India is expected to reach US$ 3,273.85 in 2023 from US$
1,983 in 2012. The maximum consumer spending is likely to occur in food,
housing, consumer durables, and transport and communication sectors.

Indian appliance and consumer electronics (ACE) market reached Rs 76,400

crore (US$ 10.93 billion) in 2019.

Appliances and consumer electronics industry is expected to double to reach

Rs 1.48 lakh crore (US$ 21.18 billion) by 2025.

 The production volume of refrigerators stood at over 12 million units across

India in fiscal year 2020. That year, the market value of refrigerators across the
south Asian country was forecast to be over 3.5 billion U.S. dollars.
Refrigerators made up a share of 27 percent of the consumer appliance
market. The domestic electronics industry was expected to increase at a
compound annual growth rate of nine percent by 2022.
 ABOUT LG
LG Electronics India Pvt.Ltd, a wholly owned subsidiary of LG Electronics, South
Korea was established in January 1997 in India. It is one of the most formidable
brands in consumer electronics, home appliances, IT hardware and mobile
communications space. In India for a decade, LG has earned a premium brand
positioning and is the acknowledged trendsetter for the industry. LGEIL's
manufacturing unit at Greater Noida is one of the most eco-friendly units
among all LG manufacturing plants in the world. The second Greenfield facility
is located at Ranjangaon; Pune has the capacity to manufacture LED TV’s, air
conditioners, washing machines, refrigerators, and monitors.
 INVESTMENTS
1. According to Department for Promotion of Industry and Internal Trade,
during April 2000 – March 2020, FDI inflow into the electronics sector stood
at US$ 2.79 billion.

2. Consumer durable loans in India increased 43 per cent y-o-y to Rs 6,495

crore (US$ 921.4 million) in FY20.

Government Initiatives
1. Announce more exemptions on the lines of last year's cut in basic customs
duty on open cells from 5% to 0%. This move helped companies pass on the
benefits to the customers by decreasing TV prices.

2. Reduce basic customs duty on inputs used in producing key components

such as motors and printed circuit board (PCB) which currently vary from
7.5%-10%. Components such as motors and PCB are further used for
manufacturing air conditioners, refrigerators and washing machines etc.
Customs duty reduction on these (components) will reduce input cost,
enabling domestic manufacturers become more competitive.

3. Announce more positive policies for the consumer appliance industry on

account of a flat growth over the last two years. This will help aid and drive
growth in the sector.

4. Reduce GST on TV and refrigerators as it will help lower costs for the
customers and push further penetration of these products in the consumer
market especially in rural India.

5. More efforts under National Policy on Electronics (NPE) to help boost the
government's Make in India vision and make India a hub for electronics
manufacturing.

6. Incentivise domestic businesses and create an ecosystem for local

manufacturing to improve India's exports.
7. Establish favourable trade agreements with consumption economies to
boost exports.