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Electronics Manufacturing To Boom In India

India's contract manufacturing business will roar ahead over the next five years, creating opportunities along with pitfalls, according to a new study.
India's contract manufacturing business will roar ahead over the next five years, creating opportunities along with pitfalls, according to an iSuppli Corp. market research report released Thursday.

The high tech market research firm said revenue from electronics manufacturing services (EMS) and original design manufacturing will expand to $2.03 billion in 2009, jumping from $774 million in 2004. The combined sector will enjoy a compound annual growth rate of about 21 percent each year.

The good news for players in the market is that India's labor costs are 30 to 40 percent less than in the U.S. "Other equally important benefits from operating in India include a fast-growing domestic market, an excellent education system, the nation's technology parks and the recent improvements in the country's transit and utility infrastructure," the iSuppli report stated.

The downside in the EMS business is the uncertainty of India's political environment and the country's often-volatile currency.

Although the predicted boom in India's EMS business is impressive, iSuppli said it is unlikely to make much of a dent in China's dominance over the EMS global business.

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