India's consumer durables market to grow 10% annually through 2030
What's the story
India's consumer durables market is on track for major growth, with a projected annual growth rate of 8-10% until 2030. This will push the market's value to an estimated ₹3-3.25 lakh crore, a joint report by Boston Consulting Group (BCG) and Confederation of Indian Industry (CII) has said. The growth will be driven by factors like rising household penetration, premiumization, and higher incomes.
Market leadership
Room ACs to drive India growth; China to lag behind
The BCG-CII report predicts India will continue to be the fastest-growing major consumer durables market, with a projected size of $30-35 billion by 2030.
The growth will be led by room air conditioners and other factors such as nuclear families, easier financing options, wider distribution networks, and premiumization trends.
In contrast, China's consumer durables market is expected to grow at a much slower pace of 1-2% annually through 2030.
Manufacturing challenge
Dependence on imports could hinder growth
The report cautions that a major chunk of India's growth opportunity could continue to depend heavily on imports if the domestic manufacturing capacity for components and materials doesn't keep pace.
Currently, the localization of bill of materials ranges between 25% and 70% across consumer durables categories.
This is expected to improve to 30-80% by 2030 as domestic component and material capacity improves.
Trade disparity
Less than 1% of global consumer durables exports
The BCG-CII report highlights that India's share in global consumer durables exports is less than 1%.
While exports are growing, they are mostly limited to neighboring markets and regions such as SAARC countries and the UAE.
To improve its competitiveness, India needs manufacturing clusters linked with component suppliers, enhanced support for joint ventures and technology acquisition, shared testing/certification facilities, lower financing costs, and better access to priority markets.
Innovation gap
Need for R&D investment
The report also notes that India's top listed consumer durables companies spend less than 1% of their revenue on research and development, compared to the 1-4% spent by global peers.
This limits the sector's potential to transition from manufacturing scale to technology leadership.
However, Indian business leaders are more optimistic about artificial intelligence's returns than their global counterparts, despite limited workforce readiness in this area.