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How Indian Electrical Materials Market Is Evolving with Changing Times?

Power | Feb, 2021

Living in the information age without electricity is unimaginable. Electricity has made the economy active all day as modern-western society thrives on constant work, technology, and consumerism. Hospitals, street-lights, modern sewage systems, factories, air traffic control systems, financial services industry are all dependent on electricity to function. A major failure in the nation’s power grid can halt our lives, causing widespread disruptions to virtually every aspect of our daily lives. The absence of electricity threatens the stability of even the most advanced civilization. 


The expeditious population expansion in India has increased the need for infrastructural development activities related to commercial and residential buildings. Megacities such as Bengaluru, Mumbai, Pune, Chennai, Kolkata, Hyderabad, and Gurugram have witnessed a steep rise in construction activities in recent years, owing to rapid urbanization. The developments have further increased the demand for power generation as well as transmission and distribution of electrical materials, which has led to an exponential growth of the India electrical materials market. Although India has sufficient power generation capacity, still a significant amount of the population is deprived of electricity due to a lack of proper transmission and distribution infrastructure. However, investments in the distribution sector by the government is expected to fuel the India Electrical Materials Market. 


According to TechSci report, “India Electrical Materials Market By Type (Circuit Breakers, Light Switches, Plugs & Sockets, Voltage Switcher, Cable Management, Cable Duct, Electrical Conduit, Others), By End User (Industrial, Commercial, Residential), By Region, Competition, Forecast & Opportunities, FY2026”, India Electrical Materials market was valued at USD 5.9 Billion in FY2020 and is projected to grow at double-digit CAGR of 17.88% during the forecast years, to reach USD 9.7 Billion through FY2026. Increasing construction activities is the major factor driving the electrical materials market in India. The construction sector is one of the largest contributors to economic activity and is expected to grow at 7-8% per annum over the next 10 years in India. Short-term expansion of India's construction activities will be driven by a mixture of fiscal support and government policies supporting the housing market in the country. Long-term growth will mainly be driven by the country's massive population, which requires continued investments into the residential building construction sector, which in turn is creating a market opportunity for electrical materials manufacturers in India.


Driving factors for the growth of India Electrical Materials Market 


·         Rapid Industrialization 

Realizing the importance of industrialization to fuel the economic development of India, the government seems to be making rapid progress in boosting the country’s industrial sector. Over the next decade, India is likely to continue its growth momentum, creating significant growth opportunities for the electrical materials market. 


·         Growth of commercial places

Commercial spaces are expanding in the country at a rapid rate, strengthening the demand for electrical materials in India. Increasing number of corporate environment, medical facilities, urban and semi-urban accommodation, restaurants, resorts, etc. are fuelling the growth of the India electrical materials market. 


·         Increasing technology adoption 

The growth in demand for telecom products has been skyrocketing and is expected to continue over the next decade. Rise in demand for IT products, auto electricals, and consumer electronics is equally brisk. Since technology needs the power to operate, the increasing technology adoption will drive energy consumption and create the need for electrical materials in the coming years. 


Impact of COVID-19 on Indian Electricals Material Market 

The commercial construction sector suffered a huge hit from the adverse effects of the COVID-19 pandemic. Infrastructural activities halted for an uncertain period, which significantly impacted the electrical materials market. Moreover, the less demand for electrical equipment hampered the business expansion strategies and initiatives. Many business collaborations, mergers, and acquisitions have been put on hold due to a lack of financial resources. Work-from-home policies and restricted movements have reduced the demand for commercial office spaces, significantly declining the demand for electrical materials. However, quarantine at home led to an increased demand for smart home gadgets for high-quality, durable better-connected products. 


Government initiatives strengthening the sales of Indian electric materials 


·         National Electricity policy 

The National Electricity Policy aims at providing a supply of electricity to all areas, protecting the interests of consumers and other stakeholders considering the availability of energy resources and the technology available to exploit these resources. The policy aims to provide electricity in rural areas by generating, transmitting, and distributing efficient electricity system.


·         Indian Electricity Grid Code 

The Indian Electricity Grid Code (IEGC) lays down the rules, guidelines, and standards that need to be followed by various agencies and participants. The objective of the policy is to encourage stakeholders to plan, develop, maintain, operate the power system in the most efficient, safe, economic, and reliable manner while promoting healthy competition in the generation and supply of electricity.


·         Smart City mission 

The Smart City mission was launched in 2015 to make housing affordable and accessible, collaborating with international firms to leverage their capital, resources, and technology. The objective of the Smart City Mission is to stimulate economic growth and enhance the quality of life of people by allowing local area development and harnessing technology, that leads to smart outcomes. Area-based development will transform existing areas into better-planned ones, thereby improving the liveability of the whole City. The mission would boost the sales of electrical materials, boosting the growth of Indian electrical materials.


·         National Mission for Urban Housing (Pradhan Mantri Awas Yojna)

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, launched “Housing for All by 2022” to promote affordable housing for weaker sections through credit subsidy in partnership with public and private sectors. Under the PMAY scheme, the government aims to construct around 2 crore houses for the urban poor with water facility, toilet facility, and 24X7 electricity supply and access. The infrastructural development on a massive scale is expected to increase the demand for electrical material in India and drive market growth.


Major developments in Indian Electrical Material Markets


·         Panasonic Life Solutions India, one of the largest construction material companies, offers a wide range of hi-tech Electric Vehicle chargers and accessories with a focus on sustainability to reduce carbon footprints. To suffice the growing demand for e-mobility, in the first phase of the roll-out, Panasonic Life Solutions India will provide high-tech EV charging infrastructure to PMI Electro Mobility Solution Private Limited for more than 1000 electric buses. The electric mobility portfolio of Panasonic Life Solution India incorporates AC chargers and DC chargers. With these services, the objective is to provide the EV fleet owners, e-commerce, and logistics companies with power, thereby assisting them to manage their fleet efficiently. In October 2019, Panasonic India unveiled a new range of smart anchor products, which explicitly targets all-in-one connectivity of multiple devices. Panasonic Life Solutions India Pvt Ltd has invariably strived to deliver simplistic solutions for residential and commercial premises to facilitate smooth functioning, specifically for multiple devices.


·         Schneider Electric has launched anti-bacterial and self-disinfecting switches and sockets under its Livia product range. The new range of products has been conceptualized and manufactured in India as a part of Schneider Electric’s commitments towards ‘Make in India’. The innovation in electric switches has been driven by the Silver Ion technology, which can kill over 99.9% of bacteria and fungi. The antibacterial range of products self-disinfects its exterior throughout its lifespan inhibiting the growth of bacteria and fungi on frequently touched switches and cover frames. The anti-bacterial additive compounds in the products impart germ controlling properties on plastic surfaces, are non-toxic in nature, and ecologically safe.


·         Signify Innovations India launched a new up-down ‘Philips TwinGlow’ LED tube-light, that provides both a bright white work mode down-light and a calming ambient relax mode up-light in a single LED batten. As most consumers continue to work from home due to the pandemic, the first of its kind, ‘Philips TwinGlow’ LED tube-light is an ideal fit for homes without false ceilings. The launch of Philips TwinGlow is a step towards making cost-effective lighting solutions for modern-day consumers. 


Challenges for the India Electrical Materials Market


Shrunk industrial production in India has inhibited the demand for electrical materials in the country. Lack of innovation and slow adoption of new technologies in electrical materials is also one of the major challenge for the market, that can affect the market growth.


According to TechSci report, “Global Electric Transmission & Distribution Equipment Market By Equipment Type (Wire & Cable, Switchgear, Transformer, Meter, Insulator & Capacitor), By Voltage (Low Voltage, Medium Voltage, High Voltage), By End-User (Energy and Utilities, Industrial, Commercial and Residential), By Region, Competition, Forecast & Opportunities, 2025”, The global electric transmission & distribution equipment market is projected to reach $ 254 billion by 2025. The electric transmission & distribution equipment comprise the equipment required for the transfer of electrical energy from a power generation plant to a distant electrical substation, with the help of interconnected lines, known as a transmission network. The key factor responsible for the growth of the global electric transmission & distribution equipment market includes the growing demand for energy from residential, commercial, and industrial segments. Moreover, the rising number of electric system installations like air conditioners, lighting systems, ventilators, and fire protection systems at residential and commercial places are some other factors, which are anticipated to boost the growth of electric transmission & distribution equipment across the globe over the coming years. Additionally, rapid technological advancements in the transmission and distribution equipment market are expected to positively influence the market growth. Also, modernization of the electric grid is anticipated to spur the growth of the global electric transmission & distribution equipment market through 2025. 

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