IESA WINWire July 18 - July 24, 2015
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10th Anniversary

IESA Technovation Awards 2015 – Nominations Open

Over the years the Technovation awards have set quality standards for the electronics and semiconductor ecosystem. The Awards will honor India’s best individual contributors and organizations that drive the industry forward; and provide them with a platform to showcase their achievements and product successes. Nominations open till September 4, 2015. Nomination Forms available on IESA Technovation Website. Click on the link for details.

Incentives buzz up industry's electronics' manufacturing pursuit
Source: DNA; July 18, 2015

Attractive government policies and incentives for producing electronic goods locally have seen the initial small investments cleared under the Modified-Special Incentive Package Scheme (M-SIPS) balloon to large investment proposals. Of late, leading Indian industrial houses are showing keen interest in the sector, said a senior government official of the department of electronics and information technology (DeitY). Ajay Kumar, joint secretary, DeitY, told dna that it would augur well for the government initiatives such as Make in India and Digital India, which are looking to bring down imports of electronic goods and components to zero by 2020. India's current electronic goods imports are to the tune of $100 billion a year and are projected to cross $400 billion a year by 2020.

Kumar said while earlier investors were quoting investment figures in hundreds of crores in rupees, they are now talking of proposals running into several thousands of crores of rupee and billions of dollars. "Earlier, the investment was not large, investors would talk of putting money in hundreds of crores. That has changed now, we are seeing people talking of investments in thousands of crores of rupee and billions of dollars," he said.

Indian ICT Hardware Market to Reach $18.25 Bn in FY2015-16
Source: Tele Analysis; July 19, 2015

In FY 2014-15, Phablets reported a phenomenal growth largely due to low cost and big screen size phones. With 50.8 million unit sales and with rural-urban break-up at around 20:80 last year, Phablets are expected to grow by around 65 percent in FY 2015-16. People are seeing phablets as a multi-utility device and coupled with the ease of usage it helps in making it a preferred device over other devices. Smartphone sales have increased by 33 percent over the last year and stood at 69.66 million in FY 2014-15. The rural-urban breakup for smartphones is 40:60 and it is forecasted to grow at 25 percent to reach 88.4 million. Smartphone is planned to grow thanks to aggressive deployment of 4G services and expansion of 3G service by mobile operators in India. Notebook is poised to grow by 17 percent in FY 2015-16 thanks to procurement of 1.1 million units by Tamil Nadu government through ELCOT route. In absence of ELCOT procurement, notebook would have shown a flat growth.

Skill shortage a big opportunity for information technology sector
Source: Financial ExpressThe; July 20, 2015

The recent launch of the National Skill Development Mission by Prime Minister Narendra Modi has enthused the Indian information technology (IT) industry as the programme gives the sector a platform to partner the government in various training initiatives on a large scale while also deriving the benefits of a skilled workforce base. The $146-billion IT industry has constantly spoken about the need for skill upgradation, not just of the people employed in the sector, but also to extend the benefits of technology to a wider population so as to make it more inclusive.

According to India Electronics and Semiconductor Association (IESA), the proportion of working age population in India will increase steadily over the next two decades, contrary to most countries. Over 15 million people enter the labour market every year in India. Over 30 million are employed in the organised sector and over 450 million in the unorganised sector. Vinay Shenoy, chairman, IESA, said, “The existing capacity falls way short of skilling these people. This initiative, in tandem with ‘Make in India’, should result in good diversity in skills and high employment outcome via a public-private partnership.”

Smartphone maker Karbonn plans to invest up to $3 million in startups
Source: ET Retail; July 20, 2015

Indian smartphone maker Karbonn Mobiles plans to invest up to $3 million each in startups as a way to build an ecosystem of apps and services for consumers, which will plug into its emerging portfolio of smartphones in the entry-to-mid price segments. The company is of the view that its two-pronged strategy will help it claw back market share lost over the last few quarters. The Delhi-based handset maker is taking after rival and largest local brand Micromax, which is investing millions into an ecosystem of startups whose features get integrated into the company's smartphones, providing exclusivity to its consumers. "We're evaluating from how the developers will be able to bring in the necessary differentiation and relevance to our consumers," executive director Shashin Devsare said. "Some of the startups that we're looking at are in India and China," he added without divulging details. Karbonn has identified several startups for exploratory talks but has not decided on the number of such startups for investments, which will depend on the specialisation, product or service that the development team can bring to the end consumers.

Govt likely to extend incentives for making electronic equipment
Source: Hindustan Times; July 20, 2015

The Union Cabinet is likely to soon extend the modified special incentive package scheme (MSIPS) that expires this month and include new products such as LED bulbs, solar cells and smart cards under it.
“A proposal to include new products could not be taken up last year due to lack of clarity on proposed amendments. The draft was sent for further clarification from ministry of communications and information technology, law and commerce and industry,” sources in the government said. MSIPS, which was introduced in 2012, offers reimbursement on central taxes and duties for a few very high technology and capital intensive products such as semiconductor chips. The scheme is aimed to creating an indigenous manufacturing eco-system for electronic products in India.

The recent draft note, viewed by this correspondent, aims to extend the MSIPS for another five years to achieve the net zero import by 2020. It also aims to promote large-scale manufacturing in the electronic system design and manufacturing (ESDM) sector in India as part of Digital India and Make in India programmes. A senior government official said, that in the last 14 months, 32 proposals that will generate a total of 42,000 jobs and involve investments of nearly Rs 9,000 crore have been approved and the investments were underway. Government estimates that by 2020, the size of the Indian electronics market will reach $400 billion (about Rs 25.5 lakh crore).

Micromax tuning into the LED TV segment
Source: The Hindu Business line; July 20, 2015

Consumer electronics firm Micromax Informatics aims to strengthen its LED television business in the next few years. The company plans to increase its manufacturing capacity, reduce imported content and introduce new features and models to tap into the rural and semi-urban markets. Company co-founder Rajesh Agarwal said: “About two years back, the LED TV business was contributing about 2 per cent to our topline. Now, it contributes about 8 per cent. Our target is to increase it to 12 per cent by the end of this financial year.” Over the past one-and-half years, the company has been focusing on building its LED TV business, he said, adding: “We understand the language of screen, and LEDs are a natural extension for our business. As smart TVs become more prevalent in the industry, we are best suited to emerge as a strong player.” Agarwal further said that going forward, the company hopes to offer smart TV options across sizes. Micromax is also looking to tap into the rural and semi-urban demand for LEDs, and is looking to offer MHL (Mobile High-definition Link) and Bluetooth connectivity across its models. With MHL options, consumers can connect their devices like smartphones and tablets to their LED TVs.

US' Boeing open to picking up stake in Indian aerospace company
Source: The Economic Times; July 20, 2015

US aircraft manufacturer Boeing is open to picking up a stake in an Indian aerospace company, its India head said on Saturday. "We are open to it. The investment environment in India has improved," said Pratyush Kumar, president, Boeing India. Kumar added however that a strategic partnership in this space would entail a host of regulatory approvals. He didn't elaborate on whether Boeing was in talks with any aerospace company in India. A strategic partnership would considerably expand the manufacturer's role in India's aerospace industry, apart from developing Narendra Modi's Make in India initiative. Boeing primarily has sourcing or technology sharing relationships with companies in India. The company currently has about 160 planes flying in India, including 21 787 Dreamliner planes with Air India. It has delivered 10 C-17 Globemaster strategic airlifters and seven P8I maritime surveillance and antisubmarine aircraft to India's defence forces. The company has around 500 employees and more than 2,000 employees work on dedicated supply-chain jobs with its 18 suppliers across manufacturing, engineering and IT sectors. It has collaborations with companies such as Hindustan Aeronautics Ltd, Bharat Electronics Ltd, Tata Group, Bharat Forge, L&T, Dynmatic Technologies, Wipro, Infosys, HCL Technologies and Infotech Enterprises.

Boost for Make in India: Local manufacturers of mobile phones, laptops regain tariff advantage with CBEC notification
Source: ET Telecom; July 20, 2015

India has restored a key tariff advantage to local manufacturers that was snatched away following a Supreme Court judgement, giving a boost to prime minister Narendra Modi's 'Make in India' campaign. Domestic manufacturers of electronic items such as mobile phones, laptops and tablets will get a boost from this incentive, as will others such as coal producers. The Central Board of Excise and Customs, the apex indirect taxes body, has said only those manufacturing goods in India can enjoy a concessional 2% duty regime without availing of tax credit on inputs, not importers who will have to pay 12.5% countervailing duty.

The Supreme Court, in a case related to SRF Ltd, a manufacturer of chemical-based intermediates, had ruled that importers could avail of lower duty regime if they did not take tax credits. This had put to risk the nascent plans of foreign investors such as Taiwan-based Foxconn Technology Group and Softbank of Japan to set up manufacturing facilities in the country and placed at a disadvantage the existing plants of Samsung Electronics Co. and Huawei Technologies Co.

India's hardware start-ups see greenshoots in local product demand
Source: Business Standard; July 21, 2015

An increasing number of start-ups are designing and building electronics hardware in India, a segment the country sorely lacks and needs on priority basis.

B N Pal, 59, is building a micro-ATM that works on solar power, has an interactive voice response system in vernacular languages and costs Rs 25,000, a fourth of the conventional money dispensers being used by banks.

A working prototype by Srishti ESDM, his company, incubated at the Indian Institute of Information Technology here, is being tested and would be ready for use by this year-end.

In Mumbai, Surmount Energy Solutions is building home automation products or sensors, which can sense the natural light in a room to switch on or off lights. Some of the sensors, under a 'BuildTrack brand, are customised for existing systems at homes and offices and can be monitored on smartphones.

Cyient acquires Pratt and Whitney’s Global Services Engineering Asia
Source: Mint; July 22, 2015

Cyient Ltd, which earns 35.8% of its revenue from aerospace and the defence sector, has acquired Global Services Engineering-Asia, an engineering and repair unit of the US-based aircraft engine manufacturer Pratt and Whitney Services Pte Ltd. An agreement for the asset purchase was signed on Wednesday. The deal is expected to close by August-end, Cyient said in a statement. The deal amount was not disclosed. The acquisition will give Cyient the capability to provide aftermarket services for the aerospace industry in the Asia-Pacific region. The Hyderabad-based engineering services provider has maintenance, repair and overhaul division within its aerospace and defence vertical. “Cyient is very proud to further strengthen our long-term partnership with Pratt and Whitney today through this transaction, and is excited to welcome these highly skilled employees into the Cyient family,” Krishna Bodanapu, managing director and chief executive officer of Cyient Ltd, said in a statement. “We are committed to growing our aerospace aftermarket services in the region and expanding our reach into other industries within Singapore,” he said. Based in Singapore, Global Services Engineering – Asia provides repairs, development and validation for aero gas turbine engine components. Pratt and Whitney is a division of United Technologies Corp.

DEFTRONICS 2015 to be held in New Delhi, September 9-11
Source: The Machinist; July 22, 2015

India Electronics and Semiconductor Association (IESA), the premier trade body representing the Indian Electronics System Design and Manufacturing (ESDM) industry will be hosting DEFTRONICS 2015, the second edition of their annual Aerospace, Defence & Internal security focused event. This year’s theme is Building Global Partnerships for ‘Make in India’ in the Aerospace, Defense and Internal Security sectors and will be held between September 9 and 11, 2015, at Pragati Maidan, New Delhi. The conferences will be held on September 9 and10, 2015. DEFTRONICS 2015 is scheduled to take place along with electronica India and productronica India 2015, India’s leading trade fairs for the electronics industry. The platform will focus primarily on aspects like opportunities in design and R&D, IP creation, nurturing entrepreneurship in the Aerospace, Defence and Internal Security (ADIS) space in conjunction with policy and business related matters and issues. The forum will also lay emphasis on specific skillset development required for ADIS ecosystem to build India as the manufacturing destination for military-industrial complex across the globe. DEFTRONICS 2015 takes a closer look at how the national theme of ‘Make in India’ can be coupled with global alliances to galvanize the country's immense potential in strategic electronics.

Investing in Internet Of Things benefits bulk of companies, says TCS study
Source: ET Telecom; July 23, 2015

A whopping 80 per cent companies witnessed a growth in revenue through investments in Internet Of Things (IoT) technology, says a study commissioned by TCS. The average increase in revenue as a result of investments in IoT is 15.6 per cent, said the biggest software exporter in the country, quoting a study conducted among 795 executives working at large multinationals. IoT refers to a network of physical objects or "things" embedded with electronics, software, sensors and connectivity to enable objects to exchange data. Only nine per cent respondents said that they saw a revenue push of over 30 per cent because of IoT, while some market leaders reported a revenue jump of as much as 64 per cent as well, the study said, adding that companies are also keen to spend more. Twelve per cent of executives surveyed said they would spend USD 100 million on IoT in 2015 and three per cent said that their investments would be over USD 1 billion. "Leaders in using IoT technologies are using it to completely re-imagine their businesses by changing every aspect of them from business models and products to business processes and workplaces," TCS Managing Director and Chief Executive N Chandrasekaran said.

Samsung looks to India R&D team in bid to stay ahead of competition
Source: Mint; July 23, 2015

Dipesh Shah, research and development (R&D) head atSamsung Electronics Co. Ltd, made several trips over two years to the small city of Kolar in Karnataka to figure out a mobile phone that would appeal to first-time users in India. Kolar was one of the cities chosen for consumer research. Insights gleaned from the research went into the low-end smartphone Samsung Z1 the company launched in January for the Indian market that runs on its operating system Tizen. Now it’s using that operating system globally for devices based on the Internet of Things (IoT, or devices connected to the Internet) including smartwatches and smart TVs. That’s not all. The South Korean electronics maker is increasingly looking to its team of R&D engineers in India to develop future technologies to stay ahead of the competition and cement its position as the world’s No. 1 smartphone maker. India, which has been a key research base for Samsung over the past two decades, is home to three of its R&D facilities and employs 10,000 engineers—the biggest talent pool globally for the company—to work on smart devices and semiconductors.

Make in India: Special incentive package for electronic manufacturing to stay
Source: Economic Times; July 23, 2015

The government has extended the special incentive package for electronic manufacturing in India by five years, a move aimed at giving a boost to Prime Minister Narendra Modi's 'Make in India' campaign.

The package, called M-SIPS (modified special incentive package scheme), has been sweetened by including 15 new product categories to the list and by easing the procedure to receive the subsidy. Smart cards, liquid crystal modules, consumer appliances such as refrigerators, air-conditioner, microwaves, fully automatic washing machines, Internet of Things products, multi-functional electronic devices and optical fibre are some new categories, a senior government official said.

Under M-SIPS, investment proposals worth Rs 20,825 crore from 63 companies had come in until May, of which proposals worth over Rs 9,500 crore were approved, according to the official. Among the 40 whose proposals were approved are Tata Power SED, Continental Automotive, Samsung, Bosch, Nidec, Tejas Networks, Motherson Sumi Systems, Nippon Audiotronix, Continental Automotive, GE BE Pvt Ltd and WiproBSE -3.16 % GE healthcare. It subsidies capex by 20% for investments in SEZs and 25% for projects outside SEZs. It even provides for countervailing duties/excise for capital equipment for the non-SEZ units.

Compiled by IESA Research

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