Calcutta: Domestic electrical and electronic manufacturers are optimistic about the growth prospects of the $42-billion industry, led by exports, as opportunities shrink locally.

According to industry body Indian Electrical and Electronics Manufacturers' Association (IEEMA), a drop in the capital expenditure by eight government-owned companies worth around Rs 8,300 crore is set to hit the industry.

The capital expenditure has been estimated at Rs 54,270 crore in 2018-19 compared with Rs 62,600 crore in the previous budget.

While NTPC will see a drop in the capital expenditure to Rs 22,300 crore from Rs 28,000 crore, Powergrid's remains stagnant at Rs 25,000 crore.

Also, a rise in the import duty on basic inputs such as steel and aluminium may make exports less competitive in the global markets.

"The domestic market has shrunk. Whatever growth we are seeing in the industry is on account of global penetration. If the industry gets its international efforts right, we expect that in 7-8 years, it could become a $100-billion industry," said Harish Agarwal, vice-president of the Indian Electrical and Electronics Manufacturers Association (IEEMA).

Rising demand in the Asean markets along with Africa and Latin America is set to keep the export demand buoyant, Agarwal added.

The industry now exports goods worth around $10 billion, which is set to increase to around $50 billion in 7-8 years.