In 2022-23, India produced wearables worth Rs 8,000 crore, up from zero levels in FY22, thanks to the implementation of the phased manufacturing plan (PMP). According to data supplied with the government, the industry expects to double production to Rs 15,000-17,000 crore in FY24.
The government’s goal is to have $300 billion in electronics manufacturing in the country by 2026, with wearables contributing $8 billion (Rs 65,000 crore), of which $3 billion (Rs 25,000 crore) will be exported.
According to a study conducted by Feedback Advisory and the India Cellular and Electronics Association (ICEA), India contributes for 4-5% of the global wearables industry in terms of value, which is mostly met by imports from China.
According to the Feedback-ICEA study, positive government policies may cause the whole domestic market to be serviced by local manufacturing, and the country could capture a minimum of 8-10% of the worldwide market share through exports by 2026.
The Indian earphone and smartwatch market increased to $2.8 billion in 2022 from $2.1 billion in 2021.
Last year’s implementation of PMP on wearables enabled domestic production reach 40% of the local market in 2022, up from negligible levels in 2021.
As part of the PMP project, customs duty on most of the components was reduced to nil in FY23, with a plan in place to impose taxes at a rate of 5-15% from FY24 to FY26 to stimulate local component manufacture.
For example, battery responsibility for wearables was cut from 15% to nil in FY23. The tariff on batteries will be 5% in FY24, 10% in FY25, and 15% in FY26. For other components, a similar duty structure has been proposed.
The domestic wearables market is predicted to reach $4 billion by 2026, but wearables production might reach $8.2 billion, including $4.2 billion in exports.
Following PMP, manufacturing growth for wearables increased by about 400% as companies began to create locally rather than rely on imports. Manufacturing expansion has directly employed around 30,000 individuals. All major wearables companies, including Boat, Noise, and Firebolt, are expanding manufacturing in India.
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