LEDinside: Scale of India’s LED Lighting Market Grows Rapidly and Is Projected to Reach US$1.14 Billion by the End of 2016

India’s lighting sector has enjoyed accelerated development recently. The scale of the country’s LED lighting market in particular is projected to expand 47.1% year on year in 2016 to US$1.14 billion, according to the 2016 Indian Lighting Market Report by LEDinside, a division of TrendForce. By 2020, the Indian LED lighting market is forecast to grow to US$1.715 billion. Joanne Wu, assistant research manager for LEDinside, said the Indian government plans to make their country the export hub for lighting products going to East Asia. At the same time, major international lighting vendors such as OSRAM and Toshiba have also set up production bases in India for supplying the global market. Driven by domestic and overseas demand, the Indian LED lighting market is expected to witness soaring growth in the near future.

Attracted by the prospect of strong profits, major international vendors, Philips Lighting and OSRAM have established R&D centers and production facilities in India. From there they will ship their products to markets worldwide. Domestic brands on the other hand generally import products from China and other countries. The exceptions are local vendors that are large enough to have in-house manufacturing capability, such as Havells and Surya.

“As they are more mature in terms of technology and product development, international brands together control a much larger share of India’s LED lighting market compared with domestic brands,” said Wu. "However, the government is committed to support the domestic lighting industry and has allocated local manufacturers 50% of the tendered volume of LED lighting products for various projects. Domestic vendors will thus be able to increase their market shares at home in the future."

Despite the rapid growth and government support, India’s LED lighting market is currently at the early stage of its development and there are gaps in the domestic LED industry chain. Wu noted that while there is a number of local companies engaging in the assembly, design and manufacturing of LED luminaires, LED chips and packages are wholly imported from abroad. Some Indian lighting vendors even buy from China finished products for local sales or semi-finished products for assembly. This reliance on foreign products and components will start to diminish as the government encourages domestic manufacturing. However, the lack of domestic suppliers in the upstream and midstream of the LED industry chain will continue to be a challenge in the short term.

 

Government policies present opportunities as well as challenges for lighting vendors

Among the policy initiatives that the Indian government has issued to spur the development of the domestic LED lighting industry, the most important two are the Street Light National Program (SLNP) and Domestic Efficient Lighting Program (DELP). Currently, these programs together account for a third of the country’s LED lighting market demand. “The goal behind these programs and public projects is to increase the adoption of LED lighting products nationwide,” Wu added, “Hence, the Indian government have also pushed down bid prices while raising the product requirements. For vendors, tender invitations are both opportunities and challenges because profit margins from these projects are very limited.”

 

Public projects make up the largest domestic market channel in India

There are four main types of channels in the Indian lighting market: public projects, the luminaire market, individual retailers and e-commerce platforms. Public projects account for the largest share of the country’s LED lighting channel market at over 35%. This is due to the government’s push to replace traditional lighting products with LED lamps. The luminaire market constitutes the second largest LED lighting channel in India. Small independent retailers operating in local communities are also an important domestic channel for LED lighting, making up 23% of the market share. E-commerce platforms are not yet a major channel for LED lighting in India because the development of the local online market is still fairly disorganized.

 

LEDinside 2016 Indian Lighting Market Report

 

Release: 31 July 2016

Language: Chinese / English

Format: PDF

Page: 130

 

Chapter One: Methodology and Report Structure

Chapter Two: Market Macroeconomics and Key Factors

Chapter Three: Lighting Market Scale and Trend Analysis

Chapter Four: India’s LED Market Supply Chain

Chapter Five: Major Lighting Manufacturers and Strategy Analysis

Chapter Six: Indian LED Lighting Product Spec and Price
Chapter Seven: India’s LED Lighting Product Specs and Standards

Chapter Eight: Indian Lighting Market Channels

Chapter Nine: Suggestion and Analysis on Entering Indian Lighting Market

 

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Joanne Wu    +886-2-8978-6488 ext. 912     joannewu@trendforce.com