The growing interest in energy efficient technology, green building status, and reducing energy bills has lent momentum for business-to-business (B2B) and business-to-customer (B2C) light emitting diode (LED) market in India. Furthermore, Government agencies like the Ministry for Renewable Energy and the Bureau of Energy Efficiency have been instrumental in raising awareness of LED’s benefits in towns and villages, to the extent of even distributing free solar LED lanterns in villages. Numerous municipalities and corporations across the country have adopted LED lighting for street lighting applications. As a result, the Indian business to government (B2G) LED lighting market is witnessing robust growth. The better efficacy, energy performance, reducing price points as well as widening options have made LED lighting a preferred option over conventional technologies. In addition, the responsibility, rightly taken up by the government sector, has cemented the belief that LEDs are the way forward for the country’s power woes.
New analysis from Frost & Sullivan (electronics.frost.com), Assessment of the Indian B2B/B2C LED Lighting Market and Assessment of the Indian B2G LED Lighting Market finds that the overall LED Lighting market in India earned revenues of more than $142.8 million in 2012 and estimates this to reach $1,278.6 million in 2018.
The Government sector is the single largest user for LED lights in India today. Apart from the large scale street lighting projects, increasing usage of LED lights for in-cabin lighting as well as the lighting of railway stations have contributed to the Government sector being the single largest adopter and growth trigger. The commercial sector in India is the second largest user of LED lights, followed by the industrial and automotive segments. Hospitality and retail sector, street lighting applications within factories, special economic zones and information technology parks are key contributors to the commercial and industrial segments.
"Government initiatives to raise awareness on the benefits of LED as an energy-efficient technology and to promote the domestic manufacturing of LED products have spurred market growth," said Frost & Sullivan Analyst. LED’s promise of quick returns through greater efficiency boosts the technology’s popularity in the Indian B2B and B2C LED segments. Moreover, improvements in technology have led to widening its scope to newer applications in the automotive sector. The energy service company (ESCO) model, which eliminates the need for initial investments by municipalities and corporations, is expected to flourish in and propel growth for the Indian B2G LED segment.
The anticipated, 10-20 percent year on year decrease in the LED lighting prices, possibly driven by tier I participants aiming to compete with the effective cost structures of tier II participants, will provide greater value to the consumers. However, this could hurt the prospects of tier II participants in high-volume segments such as the residential sector.
The huge reliance on LED imports as well as finished lighting product import is a critical challenge. Insufficient demand in India is discouraging the local manufacturers. Importers, traders and assemblers prefer to import LED lighting products instead, to avail tax benefits and budget constraints. Nevertheless, the high scale of growth anticipated in the next 3-5 years coupled with the enormous incentives offered for indigenous manufacturing under the various new Government policies such as the modified special incentive package scheme (MSIPS) and preferential market access scheme (PMAS) is expected to offset this restraint.
"The implementation of standards for LED Lighting products will enable the full-scale conversion to LED lighting and also help in eliminating the presence of sub-standard grey market products in the Indian market," noted the analyst. "Partnerships with electrical contractors and energy service companies, along with wide distribution networks, are crucial for market expansion in the country. Brands offering technical capability, superior product performance, and high quality will be able to sustain themselves in the market."
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Assessment of the Indian B2B/B2C LED Lighting Market and Assessment of the Indian B2G LED Lighting Market is part of the Electronic Devices Growth Partnership Service program. Frost & Sullivan’s related studies include: Assessment of the Indian B2B/B2C LED Lighting Market, Indian B2G LED Lighting Market, and Indian Electronics Manufacturing Services Market. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
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Assessment of the Indian B2B/B2C LED Lighting Market / P6FA-25
Assessment of the Indian B2G LED Lighting Market / P6FB-25
Nimisha Iyer, Corporate Communications South Asia, Middle East & North Africa
M: +91 98200 50519 / P: +91 22 6607 2004 - E: niyer[.]frost.com.