IESA WINWire Apr 30 - May 06, 2016
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Our top priority is accelerating design-led electronics manufacturing: IESA chief
Source: The Hindu Business Line; April 30, 2016

The India Electronics and Semiconductor Association (IESA) announced its new Executive Council for 2016-17 on Friday. Business Line caught up with the new Chairman of IESA, K Krishnamoorthy, who is Managing Director, Rambus Chip Technologies (I) Pvt Ltd, to find out what it would take for India to become one of the top electronics manufacturing destinations in the world; when the country’s first Defence Electronics Policy will be announced and his immediate priorities for the Indian ESDM (Electronic System Design & Manufacturing) industry. The top priority area is to accelerate design-led electronics manufacturing in the country. This is because we are very import dependent with over 80 per cent of components such as microprocessors, microcontrollers, display devices and over 60 per cent of products such as high-end TVs and high-end phones still being imported. All of manufacturing contributes to 17 per cent of the country’s GDP, of which approximately 2 per cent is being contributed by ESDM. The government is targeting to increase overall contribution of manufacturing to 25 per cent of GDP by 2020. We want to step up ESDM to be able to contribute significantly to that target. The demand for electronics is increasing every year across market segments like defence and aerospace, consumer electronics, automotive, healthcare, education, telecom etc; with domestic demand for electronics estimated to grow from $100 billion in 2015-16 to $400 billion by early 2020s.

IESA announces Executive Council for 2016-17
Source: The Hindu Business Line; April 30, 2016

India Electronics and Semiconductor Association (IESA), the premier industry body representing the Indian Electronic System Design & Manufacturing (ESDM) industry today announced its new Executive Council for the year 2016-17. Mr K. Krishna Moorthy, Corporate VP and Managing Director, Rambus Chip Technologies (I) Pvt Ltd who was earlier the Vice Chairman for 2015-16, has taken over the role of Chairman for 2016-17. Mr. Ashwini K Aggarwal Director - Govt. Affairs, Applied Materials India Pvt. Ltd. would be the new Vice Chairman of IESA and Mr Anilkumar Muniswamy, Director, SLN Technologies Pvt. Ltd will serve as the new Treasurer. Krishna, as he is known in industry circles, is an accomplished Electronics Industry professional with more than 35 years of experience in the field of electronics, covering a wide spectrum of functions from Silicon design, System design, System engineering, and high performance IP design in deep sub micro processes and engineering management. He is credited to have designed the first ASIC in India in 1987 that went into volume production and used in many Secure Defence Communication systems. He works with premier engineering schools in India to foster Industry/Academia relationships and played a key role in setting up the Advanced VLSI lab in IIT Kharagpur 10 years ago which today produces many high quality engineers with IC design experience.

Intel to help Odisha pocket electronics investments
Source: Business Standard; April 30, 2016

USA-based semiconductor chip maker Intel Corporation is keen to enter an alliance with the Odisha government to bring in investments to the state in the electronic system design and manufacturing (ESDM) sector.

“Intel, being a chip manufacturer, can hand hold the product manufacturers in using their technology and in selecting their preferred destinations to invest. There is a possibility that Intel can play a pivotal role in bringing investments in the electronics sector. In that case, Intel can play a persuasive role to bring in prospective investors to the state,” a government official said.

Debjani Ghosh, vice-president (sales & marketing) and managing director (South Asia), Intel Corporation had a meeting last Wednesday with state information technology (IT) minister Pranab Prakash Das and top state IT officials.

“Short and productive visit to Bhubaneswar. Pleasure to meet minister IT Pranab Prakash Das. Great to see the energy and strong will to drive the change,” Ghosh tweeted.

Commenting on the meeting, Das said, “We had a fruitful dialogue with Intel on technology collaboration and hope for positive outcomes.”

Healthcare IT now a $1 billion market
Source: The Times of India; April 30, 2016

The Indian healthcare IT market is valued at $1 billion (about Rs 6,650 crore) and is likely to grow about 1.5 times by 2020, according to a report by IT industry body Nasscom. The report said within the market, the healthcare software segment generated revenues of $96.8 million in 2014 and is likely to grow at a compounded annual growth rate (CAGR) of 11% over the next five years. Comparatively, the worldwide health tech market is estimated to grow at a CAGR of 6% to $25 billion by 2020 from $17.36 billion in 2014. In India, healthcare software is a small part of the total healthcare IT segment, comprising only about 9%. "There are about 150 companies operating in this space in India and they are creating products and solutions for a global customer and finding acceptance," Sangeeta Gupta, senior vice-president -events, research and communication at Nasscom, told ET.

There has been a sharp increase in India in the number of health tech startups - about 60% of the total number of companies -- in the past few years and these have attracted funding worth over $100 million since 2014. Gupta said wearables and well-being related solutions were seeing a lot of consumer interest and were doing well within the broader spectrum of health tech products.

ISRO: A world class Make in India example
Source: Mint; May 2, 2016

Last week, India successfully launched a satellite which finally established the country’s own satellite navigation system—only four others, the US, Russia, China and the European Union, possess this capability in the world—or more familiarly, a global positioning system (GPS) of its own. And once again it did so on a shoe-string budget. Not only will the Indian Regional Navigation Satellite System (IRNSS), made up of seven satellites, strengthen the country strategically, it will also be useful in disaster management. And, given that the footprint of the satellite navigation system will extend 1,500 km from its borders (covering all of Asia and extending to the fringes of Australia and Africa), India can share some of the capabilities with other developing countries in its neighbourhood. This is a superb achievement for the Indian Space Research Organisation (Isro). The institution and its innovations are clearly the best Make in India products and more incredible is the fact that it is the most cost effective space programme in the world. In another three years it will celebrate its golden jubilee-given its amazing track record, this will be an anniversary to look forward to.

Set up in 1969, this organization has emerged as a unicorn (not in the way we refer to start-ups). It has had to face the same constraints as other institutions as well as the fact that it functioned under overall government control. Yet it has managed to break the stereotype of a public sector company (including forging a string of commercial agreements with private sector companies) and emerged as an institution which is world class.

Defence ministry wants the private industry to take active part in defence equipment manufacturing
Source: Business Insider; May 2, 2016

In a first of its kind project, the defence ministry of India has listed out 23 major projects from all the three armed forces, from Unmanned Aerial Vehicle (UAVs), glide bombs to underwater systems and tank engines. This is being done so that Indian companies can be earmarked under the Make in India category. The list has recently been drawn up by the ministry in consultation with the three armed forces, and shares details ranging from the requirements in the coming years to the acquisition schedule, and all these things were kept secret earlier. They have found their way out because of defence minister Manohar Parrikar's upped outreach, who is also in constant touch with industry bodies and major companies indulged in military manufacturing. The projects that have been listed out include 125mm smooth bore gun barrel for battle tanks, targets for torpedo firing, advance pilot-less target aircraft, mine layers and diesel engines for naval boats. Other than listing out technical specifications of the equipment, the defence ministry has also specified their quantities so that it is easier for the industry to plan how much they should invest in the technology.

HAL to manufacture Russian military helicopters
Source: The Hindu Business line; May 2, 2016

Hindustan Aeronautics Ltd is set to include the participation of its 4,000-plus vendors across the country, to help execute the contract to manufacture the Russian Kamov military helicopters. More Indian companies are set to join the fray and participate in the contract, estimated to cost over $1 billion. Russia and India had agreed to jointly produce about 200 Ka-226T helicopters to replace the Cheetah and Chetak Choppers under the Centre’s ‘Make in India’ initiative. An agreement to this effect was signed during Prime Minister Narendra Modi’s visit to Moscow in December 2015. Sources said sixty aircraft will be supplied to be assembled in India, while the remaining 140 are planned to be manufactured at Indian production facilities. Sources added that though it is an inter-government deal drawn on the same lines as the earlier Russian Sukhoi-30-MKI fighter jets, Hindustan Aeronautics Limited (HAL) was chosen to manufacture the helicopters for the Indian armed forces given its previous experience in making copters.

A senior HAL official, speaking to BusinessLine on the condition of anonymity, said a decision had not yet been taken on the location to manufacture the copters. “Discussions are on to manufacture the Ka-226T in Nashik, Maharashtra, though Bengaluru happens to be the main ground for manufacturing helicopters. Bengaluru has the wherewithal and the necessary manpower. However, all Russian production is done out of Nashik,” said the official.

City to soon get testing centre for electronic items
Source: The Hindu; May 3, 2016

A world-class testing centre for electronic components and products will be coming up in Mysuru soon.

It will be a Common Facility Centre (CFC) coming up on 1 acre of land at Hebbal in Mysuru at a cost of Rs. 29.53 crore.

Being established under the Electronics Manufacturing Cluster (EMC) scheme of the Department of Electronics and Information Technology (DeitY), Union Ministry of Communications and IT, New Delhi, the testing centre will receive Rs. 21.31 crore as the Central government’s grant-in aid, Rs. 3.49 crore grant from the State government, besides a contribution of Rs. 4.73 crore from the cluster of electronics companies in Mysuru.

Confederation of Indian Industries (CII), Mysuru, representatives said that the Centre had sanctioned the centre for Mysuru in response to an application under the EMC scheme by the Electronics System Design and Manufacturing (ESDM) industries in Mysuru.

Speaking on behalf of the ESDM cluster in Mysuru, Vishwa Prasad Alva, managing director of Skanray told The Hindu that his company had offered land on its premises for setting up the testing facility.

“The facility will be one-of-a-kind in India. It is a comprehensive testing facility for a range of electronics products,” he said.

Make in India for mobiles: Will GST dial trouble for handset makers?
Source: The Financial Express; May 3, 2016

Foreign mobile handset makers that have set up assembling units — and lately manufacturing facilities — in India relying on various indirect tax concessions from the central and state governments fear that these incentives could go away once the goods and services tax (GST) regime is introduced. Unless policymakers give an assurance that the existing incentives of low excise duty and concessional state VAT rates would stay in the GST regime, many of these players would be forced to review their investment plans, sources in some of these firms told FE — in last year’s Budget, the finance minister had imposed a 12.5% countervailing duty (CVD) on mobile phones that were imported compared with a 1% excise duty for those made in India. Since GST is a destination-based tax on consumption, it will not be possible for states to continue to give the VAT exemptions they have given today. And since the GST will subsume all taxes, the excise/CVD advantage given by the Centre to local manufacturers will also be difficult to retain — though the Centre can keep the GST rate lower for mobile phones as compared to the standard rate, this will apply to both imports as well as local manufactures.

LeEco plans to make mobile phones in India
Source: Deccan Herald; May 4, 2016

Chinese electronics firm LeEco is planning to manufacture handsets in the country. The decision follows the phenomenal response to its sale on eCommerce website Flipkart.

“We plan to have local manufacturing. The plans for local manufacturing are at a drawing board stage currently, but we plan to start building phones from a local unit in the second half of calendar year 2016 (CY2016),” LeEco India Smart Electronics Business Chief Operating Officer Atul Jain told Deccan Herald.

We are evaluating both options — assembly as well as full manufacturing — and hope to take a call soon in this regard, Jain said, adding that the company will take all approvals (if required) from the government before starting the unit.

LeEco, which has sold four lakh units in India so far exclusively through the online route, is planning to soon sell its handsets through the offline mode.

“We have already applied to the government for setting up our own stores and hopefully plan to start selling in two months in our own stores as well as multi-brand outlets,” Jain said.

The plan is to have 6-10 own stores by the end of this CY and to have 500 franchise stores as soon as possible to sell our handsets, Jain added.

PC makers demand smartphone duty model to make in India
Source: Business Standard; May 3, 2016

Three out of four personal computers sold in India are imported. PC makers now want the government to impose higher duties on imports and encourage local manufacturing, by replicating the successful model it has adopted in bringing global smartphone companies to make in India. Nearly half of all smartphones sold in the country are now manufactured locally, however, the same cannot be said for PCs. India's PC market grew to 11.21 million units in the year that ended March 31, but less than one-fourth of them or 2.68 million units are produced locally. "We want a duty differential scheme which will create a difference in cost between importing and manufacturing. The moment you do that and manufacturing here becomes cheaper, all the players are going to jump on it," said Anwar Shirpurwala, Executive Director of hardware lobby group Manufacturers' Association of Information Technology (MAIT).

India has an ambitious target to boost its electronics manufacturing sector to $400 billion by 2020, but at the current run rate, MAIT expects that number to reach just $104 billion. The lobby group says that if those figures are to be achieved, the country needs to look beyond local manufacturing of smartphones.

India Says No to the Import of Used iPhones
Source: The Huffington Post; May 4, 2016

India has rejected a plan by Apple Inc to import used iPhones, government officials said on Wednesday, a blow to the U.S. tech giant that has been seeking to revive waning sales of its flagship smartphones. Apple sells what it calls refurbished iPhones at a discount in some countries, including the United States. Extending this practice to India would have likely helped it increase its share in one of the world's fastest growing smartphone markets against competitors with much cheaper offerings. But India, which is pushing a 'Make in India' initiative to boost the competitiveness of its manufacturing sector, rejected the proposal citing rules against importing used electronics. "India does not encourage dumping or recycling of hazardous materials," NN Kaul, a spokesman for the telecom ministry said. Apple's proposal was opposed by domestic phone makers who claim selling refurbished iPhones - devices that have been returned by buyers or repaired to factory condition after damage - would breach India's anti-dumping rules. The Consumer Electronics and Appliances Manufacturers Association had written to India's telecom ministry to stall the move.

An Apple spokeswoman in Singapore did not immediately respond to an email seeking comment.

Astra Microwave expects its JVs to take off next year
Source: Mint; May 4, 2016

Astra Microwave Products Ltd, a maker of subsystems used in the defence and telecommunication sectors, is expecting a pair of joint ventures to take off in the next financial year, which will help it earn an additional Rs.1,800 crore in revenue over five years.

One of the ventures is with Israel’s Rafael Advanced Defense Systems Ltd for joint production and supply of tactical radio communication, electronic warfare and signal intelligence systems. This venture is awaiting clearance by the ministry of defence.

The second is with Canada’s Unique Broadband Systems Ltd for ultra high frequency broadcasting, satellite uplinking and medical imaging products.

“The Canadian JV business will start from FY18 onwards and we expect to have at least Rs.300 crore of turnover from this JV in the next five years. Similarly, Rafael JV revenues will start from next fiscal year, if we complete all the formalities this year. So in the next five years, we have the prospects for about Rs.1,500 crore,” M.V. Reddy, director of operations & business development, Astra Microwave, said in a conference call on 30 April.

The company has projected sales of Rs.450 crore this year (FY17) against Rs.500 crore it had earlier hoped to achieve on the back of export targets.

Dedicated electronics parks to boost industry
Source: Times of India; May 5, 2016

Dedicated electronics parks will soon come up around the city, giving a boost to the electronics industry.

Officials of the state directorate of industries said the decision is part of the new Electronics Policy announced by the state government during the Make in India Week, which was held in Mumbai in February.

"Under the new policy, government will give some incentives to the electronic system design and manufacturing sector. A 100 hectare land area has been identified at Baur near Pune to set up an electronics park. In Talegaon, out of the 1,000 hectare land identified for development, some part has been set aside for an electronics park. This will be in Talegaon phase 2. The other area identified for an electronics park is at Khalapur in Raigad district," said SS Survase, joint director of industries.

However, he did not specify the exact location of the electronics parks at Talegaon and Khalapur.

Survase said despite being a manufacturing hub, Pune and the surrounding areas do not have that many electronics units.

The dedicated parks will act as a support system for the electronics sector.

"These parks will have integrated facilities for research and development, manufacturing and testing support to the industry. The electronics industry is different in the sense that it is not polluting and needs highly skilled people," Survase added.

India market: Lenovo and Apple seeing fast growth among top-10 smartphone vendors, says Canalys
Source: Digitimes; May 5, 2016

India's smartphone market grew 12% on year to 24.4 million units in the first quarter of 2016, according to Canalys. Among the top-10 vendors during the quarter, Lenovo grew the most with shipments up 63%, while Apple saw its shipments climb 56% making it the second fastest-growing vendor.

Thanks to its value-for-money handsets and offline channel strategy, fourth-ranked Lenovo saw its shipments surge 63% from a year earlier in the first quarter of 2016, Canalys indicated. Meanwhile, though in eighth place, Apple continued to climb in India with shipments rising 56% on year during the same period.

Samsung Electronics continued to lead the India smartphone market in the first quarter of 2016, followed by Micromax, Intex, Lenovo and Lava, Canalys said.

"Over the past 18 months, India's smartphone market has been rocked by dramatic changes. The rise of online channels, the arrival of new international vendors (particularly from China), the move to LTE and the desire for higher-quality devices have all had a big impact. Indian companies have struggled as incoming vendors have been quicker to address these trends," said Ishan Dutt, research analyst at Canalys. "Micromax, in particular, has been through tough times, with key executives leaving. Now the company is aiming to revamp its strategy to incorporate an ecosystem of services around payments and content."

Micromax's share of the India smartphone market fell by a couple of percentage points to 16.7% in the first quarter of 2016, Canalys disclosed.

Apple coming here only to make new products: Prasad
Source: Hindu Business Line; May 6, 2016

“Apple is coming to India, only to manufacture new products, as part of the electronic manufacturing programmes,” Telecom Minister Ravi Shankar Prasad said clearing the air on the issues of refurbished Apple smartphones coming to India.

Prasad told BusinessLine that recently senior officials of Foxconn have met him and they have shared that Apple has plans to make only new products from India.

The Minister said there has been lot of issues on the reports of Apple going to sell refurbished smartphones in India and therefore, he wanted to clear things, on the subject.

“Dr Louis Woo, Head (Channel Business Group) Foxccon, had met me recently and I have requested him to consider exploring manufacturing in India and the company will be given all help. Woo showed keen interest and assured of positively exploring India while acknowledging the great potential of the Indian market. He never made any mention of having a second hand facility of Apple phones in India,” he said.

Prasad said that he emphasised upon Woo to have a manufacturing base here as well for Apple’s new and existing products, as the company already has a significant market share in India.

Compiled by IESA Research

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