India to outperform in electronics manufacturing race, become a $104b market by 2027

IT hardware device sales to book double-digit growth this year.

India’s IT hardware market is expected to register a compound annual growth rate of 12.8% in the next four years on strong demand and rising domestic production, according to Fitch Solutions.

Fitch estimated the country’s IT hardware industry to grow to $104b by 2027 and still dominate the overall IT market with a 53.5% market share, it said in a 22 November note.

While software and digital services are seen increasing their relative shares of the IT market, it said South Asia’s ongoing digital transformation still offers hardware device manufacturers room to grow their revenues further.

For this year, hardware device sales are expected to climb by 12.5% to $104.1b compared to last year on strong demand brought about by continued modernization of companies and a wealthier population.

Fitch also pointed to the country’s above-average risk/reward index profile as a main appeal for tech firms reconfiguring their supply chains, considering the severe blow of US chip export restrictions to China currently. 

“A large addressable market of consumers and a trend of tech companies looking to re-route their supply chains due to geopolitical risks makes us believe India's consumer electronics market will outperform its regional peers,” it said.

Setting up shop in the country also allows companies to tap both the domestic and Southeast Asian markets, it added.

Fitch sees domestic production gathering momentum in the near term after about 27 electronics manufacturers made INR30b ($360m) in fresh investments recently, while the government continues to incentivize companies to boost domestic production.