New Delhi, (IANS) : The demand for electronic products in India is expected to grow at a compound annual growth rate (CAGR) of 41 per cent during 2017-20 to reach $400 billion by 2020, a study said on Monday.

According to a joint study by industry lobby Assocham and IT company NEC Technologies, the domestic production of electronic products — which is currently growing at a CAGR of 27 per cent — may touch $104 billion, leaving a huge gap for import to the extent of $300 billion.

“India is becoming home to a growing middle class population. Increasing disposable income has led to increased consumer demand for electronics products specially advanced TVs, mobile phones and computers. This surge is huge which shows a positive outlook for the industry,” the study said.

The study pointed out that domestic production needs to be addressed to meet the government’s vision of turning India into a manufacturing hub.

“Demand for electronic products in India is poised for significant growth in the next few years, driven by a strong economic outlook. The Indian electronics and hardware market grew by 8.6 per cent year-on-year to reach $75 billion in 2015, driven by rising local demand,” the study said.

The worldwide electronics industry was valued around $1.86 trillion in 2015. The electronics industry, valued at $1.75 trillion, is the largest and fastest growing industry in the world, said the study.

The study said India’s total electronics hardware production 2014-15 was estimated at $32.46 billion, representing a share of about 1.5 per cent in world electronic hardware production.

“The domestic consumption of electronic hardware in 2014-15 was $63.6 billion, of which 58 per cent was fulfilled with imports. With demonetisation adding to the demand for POS (point-of-sale) devices and mobile phones, this demand is going to increase manifolds,” it added.

In addition, investments in electronic manufacturing rose exponentially to Rs 127,880 crore in 2016 from Rs 11,000 crore in June 2014, it said.

“This is also due to the government’s efforts to create an enabling policy ecosystem in the sector bringing through initiatives like Make in India and Digital India and providing special focus to schemes like the modified special incentive package scheme (M-SIPS) and electronic development fund (EDF),” it said.

“The industry suggests the government to focus on both infrastructural as well as at the policy level, increased emphasis has to be provided for increasing the percentage of local component manufacturing in India,” it added.