While India's electronics industry is still in its infancy, some distributors see the country as the next hotbed for electronics distribution because India's OEMs have a history of using distributors rather than buying direct.

"In the late 1990s and in 2000, most semiconductors sold in India went through distributors," says Kamath Suresh, general sales manager for Avnet Electronics Marketing Asia. "Suppliers did not have a presence in India and did not see business growing there. There was no concept of direct customers. Everything was through distribution," he says.

Over the last three years that has changed a bit and some semiconductor and component manufacturers have started to set up offices in India. Still only about 5–10% of the component business has shifted from distribution to component manufacturers, according to Suresh.

With major OEMs and electronics manufacturing services providers increasing their presence in India, distributors doing business there can expect strong revenue growth. Roy Vallee, CEO of Avnet, says Avnet is seeing very high growth rates coming out of India. Avnet's business is coming from indigenous OEMs which build white goods and from EMS companies that are starting to set up shop in India.

"It will be a while before India is the size of China, but we are established in India and I am encouraged by our prospects," says Vallee. "We are well positioned there."

In addition to white goods, equipment such as set top boxes, cell phones and some telecommunications base stations are being built there, he says.

"India is the region to watch," says Michael Long, president of Arrow Global Components. "We are investing and we will build infrastructure as the market grows. We will be there to support the manufacturers that build in India."