As we step into a new era of younger population mix increasing and per-capita income growing at a faster rate in light of the growing contribution of the services sector to the GDP, demand prospects are promising. But will players be able to sustain profitability with threat from imports growing day-by-day?

Key Positives Yet to catch up:  Penetration of durables continues to remain sluggish when compared to other developing economies. The India story:  Rising income levels, consumption patterns and urbanization are some of the key factors that would result in higher growth in volumes in the long run. Better affordability:  Easy availability of finance has stimulated consumers to buy durables. Rural unexploited:  With the government focusing on rural electrification programme, the consumer electronic manufacturers stand to benefit over a period of time. But this has been slow to come by.		Key Negatives Mismatch in duties:  Higher import duty on key raw materials (ex: colour picture tubes) has been a cause of concern. Fiercely competitive:  Exchange schemes and pricing-play by some manufacturers have had a negative impact on top players. Prices of durables and electronics have been on the decline over the last three years Growth is slow:  Volatile performance of the agricultural sector has had a negative impact on demand. The sector's performance is highly dependent on monsoon and reforms, which has failed often. Imports Vs Indian:  Threats of cheaper imports from China and other South East Asian countries, both for electronics and watches.

Budget 2005-06: Complete Coverage

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