The Indian electronics market estimated at Rs 3.25 lakh crore in 2010 is expected to reach the volume of Rs 5 lakh crore by this year-end and Rs 20 lakh crore by 2020, industry body ASSOCHAM said Tuesday.

If local production continues to grow at a similar pace, it is expected to fall short of Rs 15 lakh crore during the same period. A strong push to domestic manufacturing is thus essential to bridge the demand-supply gap and generate mass employment, said the Associated Chambers of Commerce and Industry of India.

“A national strategy should be formulated through discussions with key stakeholders including existing manufacturers and members of the MSME sector, industry associations, respective government departments and regulatory bodies,” said ASSOCHAM secretary general D.S. Rawat.

In recent years, high-volume sourcing of components and final products through imports has hampered the growth of electronics manufacturing base. Excessive dependence on imports can also involve national security issues in future, he said, adding there is need to create industrial clusters for fostering innovation and manufacturing domestically.

 “There is a growing consensus that electronics industry needs a special emphasis. It will encourage value generation, revenue generation and employment generation,” said Rawat.

He added that practical and implement-able solutions should be worked out while establishing centres of excellence for incentivising collaborative research and development initiatives between MSMEs and MNCs.

Absence of feeder industries is the biggest hurdle for electronics manufacturers to set operations. “The government needs to take quick steps to start developing an ecosystem which will attract manufacturing investments,” he said.

According to a recent knowledge paper prepared by ASSOCHAM and Frost & Sullivan, the 2020 guidance is expected to catapult India’s contribution to the 1.8 trillion dollar global electronics industry to 15 per cent from the current low contribution of 2.5 per cent.

Rising localisation of electronics manufacturing is a bellwether for propitious future of local semiconductor industry. Increasing assembling and manufacturing activities bode well for the semiconductor market as it awaits the dormant opportunity to turn active.

The past decade has been remarkable from a consumption perspective: 1.8 crore mobile phones in 2003 to 17.2 crore units in 2010, shipment of 30 lakh personal computers to over 82 lakh, from a non-existence LCD TV market in 2003 to rapidly growing sales of 35 lakh units.

The mobile revolution, an expanding middle class, growing emphasis on quality healthcare to the masses, increasing government spending on aerospace and defence, and enhancing significance of energy efficiency are all key trends influencing the growth of Indian electronics industry.

The global electronics industry reported at 1.75 trillion dollars is the largest and fastest growing manufacturing sector. It is expected to reach 2.4 trillion dollars by 2020.