Navigating Growth in the Consumer Durables Industry in India

India is currently the world’s fastest-growing major economy and the largest by population, comprising over 18% of the global populace and accounting for 3% of total consumption. This massive market is poised to become the third-largest consumer market by 2027, driven by rising consumer spending power, changing lifestyles, and evolving tastes for consumer durables and electronics. This rapid growth in the consumer durables industry in India presents unparalleled opportunities for manufacturers, retailers, and other stakeholders to capitalize on the burgeoning demands from Indian consumers.

The consumer durables and electronics industry in India is segmented into small and large appliances, as well as consumer electronics. The market for consumer durables in 2024 is valued at $34.7 billion and is projected to reach $45.6 billion by 2028, growing at a CAGR of 7.1%. Meanwhile, the consumer electronics market, valued at $79.7 billion in 2024, is expected to grow to $108.8 billion by 2028, with a CAGR of 8.1%.

This upward trend in penetration and premiumization is driven by rising aspirations, increasing disposable incomes, and more promotional offers. Key categories such as Televisions, Air Conditioners, and Refrigerators show significant growth potential, with air conditioners being notably underpenetrated in India at only 8%, compared to the global average of 42%.

Government Initiatives and Support:

During the last quarter of FY24, the Indian government distributed approximately Rs. 79 crore (US$ 9.51 million) in fiscal incentives under the Production Linked Incentive (PLI) scheme for white goods. This PLI scheme for White Goods (air conditioners and LED lights), running from FY 2021-22 to FY 2028-29, has approved 64 applicantThe Indian government has distributed Rs. 79 crore (US$ 9.51 million) in incentives under the PLI scheme for white goods in Q4 FY24. The scheme, running from FY 2021-22 to FY 2028-29, has approved 64 applicants with a total committed investment of US$ 814 million (Rs. 6,766 crore). Efforts are underway to create a common data repository on service centers and repair policies for consumer durables to safeguard customer rights.

Since November 2021, 42 companies have been selected under the PLI scheme for white goods, with an investment commitment of Rs. 4,614 crore (US$ 580.6 million), expected to generate 44,000 jobs. An additional 19 companies applied in April 2022, committing Rs. 1,548 crore (US$ 194.79 million). The PLI scheme has facilitated the establishment of 61 component manufacturing units across 14 states, boosting employment.

The government continues to push for self-reliance through the “Make in India” initiative and has extended the PLI scheme for large-scale electronics manufacturing until FY26. The National Policy on Electronics 2019 targets the production of one billion mobile handsets worth US$ 190 billion by 2025, with 600 million units (US$ 100 billion) slated for export.

The government has permitted 100% FDI under the automatic route in electronics manufacturing and has increased the FDI limit in single-brand retail to 100%, with plans to raise it to 51% in multi-brand retail.