This is due to factors like reliability, after sales services and the guaranteed quality of the products offered by manufacturers in India. Indian LED lights are now on par with high-end, branded imported lights.
The LED lighting industry in India is experiencing robust growth and fast-changing trends. According to the Electric Lamp and Component Manufacturer’s Association of India (ELCOMA), the size of the current LED lighting market in India is around Rs 10 billion, and is expected to grow by about 40 per cent per annum over the next five years, to touch Rs 80-120 billion.
“Growth is primarily seen in indoor area lighting, outdoor streetlights, and industrial and portable lighting,”
states Amrith Prabhu, country manager, India, Philips Lumileds Lighting Company. “Indoor office lighting includes 2×2 troffer and downlights, which have shown great growth over the past years even while LED streetlighting continues to grow steadily. Other segments that are expected to grow quickly are retail lighting and industrial lighting,” he added.
Market Trends
India-made products vs imported products: A major trend is that India-made products are slowly gaining ground and the dependence on imported products is reducing. Industry experts feel that imported products are not cutting into the market share of Indian products. “Despite cheap Chinese and other imported products, the demand for Indian LED lights is gaining ground,” says Ravi AV, general manager, Nichia Corporation India. “This could be due to various factors like reliability, after sales service and the guaranteed quality of domestic products. Usually, we are dependent on imports for signages, displays, fancy lightings, and a few fixtures but not the whole lighting unit,” he adds.
According to Arun Gupta, managing director, NTL Lemnis India Pvt Ltd, the demand for ‘Made In India’ products has gone up compared to imported products, as the customers are aware of the poor quality of imported LED products that are flooding the Indian market. “The lights that are a result of Indian R&D are far superior to imported lights in terms of the materials used, durability and light quality. Imported products do not have electronics components like drivers that could withstand the Indian power conditions; hence, they fail in Indian conditions,” he says.
Among the India-made products, the demand for LED streetlights and LED solar lights is expected to grow rapidly in the coming years. Shares G Gururaja, director, Avni Energy Solutions Pvt Ltd:
“The demand for India-made downlights, 2×2, tubelights and streetlights is high, as these products come with a 2-3 years warranty. Products like MR16, striplights and panel lights are usually imported.”
However, Vijay Kumar Gupta, managing director, Kwality Photonics (P) Ltd, is of the opinion that though India-made products witnessed healthy growth last year, imports are still in excess of 75 per cent, and this ratio would continue for some time even in the growing Indian market.
“However, the Preferential Market Access policy mandating 30-60 per cent of local content, could break this ratio,”
he says. Last year, new business came from LED bulbs, LED tubelights and high bay lamps, showing a clear slant towards indoor applications in the commercial segments covering offices, hotels and factories. Stored energy applications like lanterns and portable vendor lighting also recorded good demand.
“This meant huge growth for 20ma-8lm 3528 LEDs, 60mA 24lm 2835 LEDs and 150mA-50lm 5630 LEDs,”
says Vijay Kumar Gupta.
Growing demand for indoor applications
With the introduction of mid-power LEDs, which are very affordable and easily manage heat dissipation, a huge change has taken place in the LED indoor applications like downlights, workstation lights, tubelights, etc. Explains G Gururaja,
“In 2011-12, 80 per cent of our revenue was from LED lights for outdoor applications, but in 2012-13, more than 65 per cent of our revenue was from indoor lights. More than 30 per cent of CFL downlight sales in green field projects are now being taken over by LEDs, especially in big projects where architects designing lighting for these projects are recommending LED lights in indoor applications.”
Another advantage of low and mid-power LEDs is that their lumens/watt/dollar (lm/W/$) works out to be the most economical.
“Due to this, the price of LED indoor lights is almost on par with that of CFL lights,” G Gururaja adds.
Besides indoor usage, outdoor and industrial applications have also picked up, and higher power LEDs continue to be used, driven by high lm/W and superior system reliability, while low- and mid-power LEDs are being adopted in indoor applications due to better lm/$ and reduced hot spots on diffusers in 2×2 troffer and downlights. Chip on boards (COBs) are also gaining popularity in retail, office and industrial applications, states Amrith Prabhu.
Shift from CFL to renewable energy: There is a strong movement towards sustainable solutions in lighting and as of today, LEDs seem to be the next big thing, not only globally, but in India as well. Europe has banned high wattage incandescent bulbs and is slowly phasing out the lower wattage bulbs as well. There is also not much of a market for CFLs in Europe. After the tsunami that hit the Fukushima coast in 2011, placing a question mark on Japan’s high dependence on nuclear energy, the country has also focused on replacing all incandescent bulbs and fluorescent lamps with more energy efficient LED lighting by 2020. This trend is catching up in India as well, although at a slow pace, at the moment.
Another factor which is set to boost the demand for LED lighting in India is the shift towards renewable energy like solar power.
“Since LED lights offer low power consumption, they are a better option for solar applications, as they reduce the solar panel and battery size. As a result, the demand for solar applications for streetlights and emergency lights has increased like never before,” says G Gururaja.
Increased Focus On Quality And Technology
With stiff competition from branded imported LED products, Indian manufacturers have begun improving the quality of their products and are going for advanced technologies. Industry experts believe that with respect to quality or technology, Indian LED lights are now on par with high-end, branded imported lights.
“Although Indian products do not lag behind imported LED products from the technology and quality point of view, we are no doubt having a tough time optimising the cost of mechanical fixtures. Hence, to face this challenge, we have to focus more on improving our technical strengths in mechanical fixtures and secondary optics,” says Ravi AV.
G Gururaja is, however, concerned that products from China are cheaper and they have better aesthetics. So customers who are not very aware of the reliability factors of these products, do end up buying them, even without any warranty. Chinese products like MR16, strip lights and some downlights move fast in this market.
“Investment on moulds is very high, and so Indian lights lag behind in terms of aesthetics of the products,” he says.
According to Amrith Prabhu, the import of high-end LED lighting products improves the market. The high quality of these products demonstrates the flexibility of LEDs.
“However, there are low-end and non-standard LED lighting products being imported, which remains a concern. Further, the demand for India-made LED lighting products is higher, as these products are designed taking into consideration local power and environmental conditions,” he says.
Adds Vijay Kumar Gupta,
“Indian products have global quality and technology, yet shoddily designed products manage to sell due to low prices. This is also because of the poor implementation of regulations, which enables poorly designed products to be sold, legally. Players that don’t compromise on designs for thermal management and reliability in driver electronics, will see growing business in the coming years… once the dust settles down in another two years.”
LED adoption in metropolitan as well as Tier II and III cities
The LED industry is witnessing a rise in demand for LED lighting from metropolitan cities as well as Tier II and III cities. While metros like Delhi, Mumbai, Bengaluru and Chennai have registered a rise in demand, the market in cities like Hyderabad, Ahmedabad, Jaipur and Pune has grown even faster. Cities in Haryana, where BPO activities are strong, have also seen growing demand. In Tier II and III cities, the continuous power shortages are driving demand from the hospitality and emergency lighting sectors.
“LED street lighting is much in demand in Tier II and Tier III cities followed by downlights, and spot lights for shops and the hospitality sector. LED lights are now available with distributors and retailers in these cities; so, easy availability is also driving their adoption,” adds Amrith Prabhu.
Buying trends
“With the falling prices for certain products like LED downlights, LED bulbs and LED lamps, demand has increased,” says Ravi AV. G Gururaja agrees, saying that, “The cutting down on the price of LED lights has increased the buying power of Indian customers. People who prefer energy efficiency are also switching over to LED lights.”
Shares Vijay Kumar Gupta:
“The buying pattern has gradually moved from being brand driven to being price driven. The user industries have gained confidence in Indian manufacturers who have demonstrated their capability to deliver quality goods successfully to the price conscious customers.”
According to Arun Gupta, LED-based lighting is a new technology and consumers are yet to understand its benefits and adopt it.
“LEDs are 50 per cent more energy efficient than CFLs, and have a longer life than CFLs. Theoretically, they can last up to 50-60K hours, but as of now, the Indian LED industry is assuring a life of 20-30k hours only. In the near future, with the increasing awareness of consumers, the buying trend for LED lighting will pick up significantly. Although the use of LEDs in domestic applications will take some more time, LED implementation has already started in the professional sector because of its short payback period,” Arun Gupta informs.
Price trends
The prices of LED products have been falling steeply, year-on-year, which has led to increased penetration of LED lighting products in India, across different sectors.
“Due to cost optimisation and technical advancements in LED chip and power electronics, the prices of luminaires like downlights, bulbs and streetlights have been brought down to some acceptable level,”
says Ravi AV. For example, 15W downlights, which were selling at Rs 2500 each, have come down to around Rs 1500. Even LED tubelights of 18 W, which replaced 36W FTL, have come down from Rs 3000 to around Rs 1700.
Says Vijay Kumar Gupta, MD, Kwality Photonics:
“The selling prices of both larger and smaller players have converged to below Rs 100 per watt in LED fixtures. Our contribution to this fall was Rs 4 to Rs 9 in 150ma LEDs, Rs 3 to Rs 6 in 60mA LEDs, below Rs 2 in 30ma LEDs and below Rs 1 in 20mA LEDs—all in the economy category, which in turn, helped many a customer to be weaned away from unreliable imports.”
Arun Gupta predicts that the prices of LED lights are likely to fall even further in the coming two to three years as the Indian government plans to start chip manufacturing in the country soon. Also, some other efforts like the recent reduction of VAT from 12.5 per cent to 5 per cent on LED products, by the Delhi government, have added to the fall in prices.
Pros and Cons Of India Market
- Advantages
- India has an excellent talent pool
- Low cost technical staff
- Virgin market, very few players, hence less competition
- Huge market, hence huge opportunities
- Demand from growing cities
- Government’s initiatives to boost the Indian LED industry
- Great R&D facilities available in India
- Quality and technology on par with global products
2. Disadvantages
- Lack of a supply chain or vendor base and the absence of a manufacturing ecosystem
- Poor power and infrastructure, high capital costs, and lower worker productivity have a direct bearing on the time to break even for manufacturers
- The absence of a capital goods industry which could otherwise help in the automation of some processes and reduce dependence on operator skills
- A large section of Indian consumers are still unaware about the benefits of LEDs
- The presence of sub-standard Chinese products
- Lack of technical standards to govern quality
- The government still needs to do a lot to promote the use of LEDs
What will be happened in the next years?
- Key segments contributing to the growth of the Indian LED market – Hospitality, retail, industry, commercial, residential and automotive
- Regions contributing to the demand for LED lighting – North and south, though the west is also picking up
- Cities contributing to the demand for LED lighting – Delhi, Mumbai, Bengaluru, Chennai, Hyderabad, Ahmedabad, Jaipur, Pune and Hyderabad
- Tier II & III cities contributing to the demand for LED lighting – Demand in these cities has picked up, both in hospitality and emergency lighting sectors due to continuous power shortages experienced