In the IT Sector the software industry has emerged as one of the fastest growing sector in the economy with compound annual growth rate exceeding 50% in the last five years and exporters worth of US$ 5.8 billion in 2002-03.

The electronics industry has recorded very high growth in recent years.  The easing of foreign investment norms, allowance of 100 percent foreign equity reduction in custom tariffs, and delicensing of several consumer electronic products attracted investment.  The domestic industry also responded favorably to the economic policies of the government. The opening of the electronics field to private sector enabled entrepreneurs to establish industries to meet hitherto suppressed demand.

Improvements is the electronics industry have not been limited to a particular segment but encompass all its sectors, Strides have been made in the areas of commercial electronics software, telecommunications, instrumentation, positioning and networking systems, and defence.  The result has been a significant trade growth that began in the late 1990s.

Consumer electronics is the largest sector of electronics hardware Industry and accounts of almost 40% of the total electronics hardware production.

Consumer electronics sector is estimated to achieve a production level of Rs. 14,400 crore during 2002-03 as compared to Rs. 12,700 crore in the year 2001-02, thus achieving a growth rate of 13.4 per cent. The colour TV segment that contributes over 60% of the turn over of the consumer electronics industry has witnessed impressive growth of 25% over the previous year.  The total production of colour TV was reported at 75 lakh units during the year 2002-03.  The price difference between flat and conventional TVs has been narrowing.  But a negative growth as production is estimated to have dropped to 31 lakh units from the level of 38 lakh units in the previous year.

During the year 2002-20003 audio products have also witnessed high growth with sales of music systems with VCD/AD and MP3 compatibility gaining momentum.  The general purpose tool room machines are generally produced locally unless these are the part of the total project.  None of the machines and equipment required in the manufacture of electronics hardware including tools, moulds, dies etc. are locally available.

So there is a need to have a competitive climate for investment and production comparison with the present in the competing countries including those related to customs, foreign exchange regulations, labor laws, banking facilities and support infrastructure.