Meanwhile, Indian consumers’ confidence about general economic situation, employment scenario, their income and spending have weakened, according to the latest survey of the Reserve Bank of India (RBI). Consumer confidence for the current period declined marginally owing to weaker sentiments across the survey parameters except household spending, the RBI’s bi-monthly consumer confidence survey (CCS), which was conducted during November 2-11, 2024, showed. The current situation index (CSI) moderated by 0.7 points to 94 in November 2024 from 94.7 in September 2024.

The RBI survey collects current perceptions (vis-à-vis a year ago) and one year ahead expectations of households on general economic situation, employment scenario, overall price situation, own income and spending across 19 major cities. Households displayed somewhat higher optimism on one year ahead outlook for major economic parameters, except prices. The future expectations index (FEI) improved by 0.5 points to 121.9 in the latest survey. The CCS survey showed that households anticipated higher spending over one year horizon on the back of higher essential as well as non-essential spending.

Demand for range of consumer durable goods growing

According to India Brand Equity Foundation or IBEF, the demand for a wide range of consumer durable goods is growing as a result of the ongoing increase in disposable income and technological innovation in India. This in turn is fueling fierce competition among the various consumer durable brands that are available across the country. The consumer durables industry in India includes home appliances, electrical goods, jewellery, building materials and HVAC systems.India is viewed by multinational organizations as one of the primary markets from which future growth is likely to originate. During (April-June) 2024, electronics exports reach US$ 8.44 billion.  With robust growth, India aims to achieve electronics manufacturing worth US$ 300 billion and electronics exports of US$ 120 billion by FY26. By 2025, India's Consumer Electronics and Appliances Industry is predicted to be the fifth-largest in the world.

The Indian Appliances and Consumer Electronics (ACE) market is predicted to nearly double in the next 3 years, reaching approximately Rs. 1.48 lakh crore (US$ 17.93 billion) by 2025. Smartphones have emerged as India's fourth-largest export category, experiencing a 42% growth to reach US$ 15.6 billion in FY24. The Indian appliances and consumer electronics industry stood at US$ 9.84 billion in 2021 and is expected to more than double to reach Rs. 1.48 lakh crore (US$ 21.18 billion) by 2025. Electronics hardware production in the country stood at US$ 87 billion in 2022. India's consumer electronics and home appliances market is set to grow by US$ 2.3 billion between 2022 and 2027, registering a CAGR of 1.31%. The Indian room air conditioner market is projected to reach Rs. 50,000 crore (US$ 5.6 billion) by FY29.

Outlook:

All-India House Price Index or HPI increased by 4.3% (y-o-y) in Q2:2024-25 as compared to 3.3% growth in the previous quarter and 3.5% growth a year ago. Housing market trends are critical for the consumer durables sector in terms of shaping up new demand. Overall economic outlook remains steady and is likely to keep consumer durables sector supported. Reserve Bank of India (RBI) stated in a latest monthly update that Port traffic contracted in November 2024, driven by iron ore and petroleum, oil and, lubricants. The construction sector exhibited a mixed picture; steel consumption recorded a double-digit growth (y-o-y) in November whereas cement production growth decelerated in October. Available high frequency indicators for the services sector reflect resilient economic activity in October/November. Meanwhile, domestic households see inflation inching up further, a latest survey from RBI reflected. A somewhat larger share of respondents expects the year ahead price and inflation to increase, mainly due to higher pressures from food items and housing related expenses.