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  IESA WINWire August 27 - September 02, 2016 for Subscription click here  
11th Anniversary

Delhi’s friendly neighbourhood Noida is now India’s hub for mobile production
Source: Business Insider; August 27, 2016

Most of the Samsung smartphones that Indians have in their hands today, along with the ones from home-grown brand like Karbonn, Lava or Intex, are being 'Made in India,' with high chances that they were assembled in the Noida-Greater Noida region, the Uttar Pradesh industrial city neighbouring Delhi.

Last year's budget announced a 10.5% duty differential between imported devices and the ones made in India, after which Noida became the country's biggest smartphone hub, being able to make more than 140 million devices per year, a whopping 40% more than what's needed in a year.

Even though all the critical components of a smartphone, processors for example, still come from China and Taiwan , Noida still remains a key part for the industry, with the local industry giving about 5-8% of value addition at present, which can be taken up to around 35% in coming five years.

It all started with Samsung starting local manufacturing a decade ago, seeding a significant number of smartphone component suppliers from Noida.

"All our mobile phones, from feature phones to the Galaxy S7 that we sell in India, are manufactured at our Noida factory, and we will continue to explore future investment opportunities,"

a spokesperson for Samsung told TNN.

Bharat Electronics to invest Rs 300 cr in advanced night vision devices plant
Source: Business Standard; August 27, 2016

The Bangalore-based Bharat Electronics Ltd (BEL) is setting up the country’s largest manufacturing facility for advanced night vision products at Nimmaluru village, near Machilipatnam in Krishna district of Andhra Pradesh. The new facility, which is about 16 km from the existing unit of BEL at Machilipatnam, will be built in stages over four years and incur an estimated investment of about Rs 300 crores.

S K Sharma, chairman and managing director, BEL, said,

“Bharat Electronics has been continuously engaged in design, development and manufacturing of electro optics equipment and night vision products for defence and paramilitary forces. The new facility has been planned now to establish a state-of-the-art factory to cater to the futuristic requirements for night vision products."

’In order to support the government's Make in India initiative, BEL is extending its support to start up companies and MSMEs through procurement of specific items from them.

Sharma added, "To achieve self-reliance in defence there is a need for establishing world-class manufacturing facilities. BEL is coming up with a modern defence systems integration complex at Palasamudram in Ananthapur district of Andhra Pradesh to give further thrust to indigenous development and production of future defence systems."

Indian Navy forum looks to 'Make in India' with MSME participation
Source: The Times of India; August 27, 2016

Indian Navy Forum, in association with ASSOCHAM and SICCI, said that they aimed to come up with the first Indian Aerospace and Defence manufacturing cluster with the help of the government of Tamil Nadu in Sriperumbudur in line with "Make in India."

Trying to optimise the defence forces reliance on Indian MSMEs, the new cluster could be the next growth engine in the state, said K Balasubramanian, chairman, SICCI MSME Committee.

"The establishment of an Aerospace and Defence Park in Tamil Nadu would result in the generation of more than 10 lakh jobs and would stand to attract investments of more than Rs 60,000 crore and bring in Rs 20,000 crore of tax revenue to the state's coffers, over a ten year period. Our vision is to create the first Indian Aerospace and Defense Park under the new DPP,"

said Vinod Surana, co-chairman, ASSOCHAM Southern Region.

"The role of MSMEs in making Indian defence self-reliant is crucial and there is great potential if we can build a strong MSME ecosystem. Currently we are importing many parts for floats, hulls, and sensory aids - it would be great if we can originate and service turbine engines, alternators, auxiliary mechanical systems, fire fighting systems,"

said Indian Navy Vice - Admiral (Retd) B Kannan. Kannan, who is also the chairman of ASSOCHAM Defence Manufacturing Committee, said that Tamil Nadu's industrial strength needs to be harnessed for the aid of the defense forces.

Big market, not so big manufacturing
Source: The New Indian Express; August 28, 2016

IT has always been a dream to have a well-structured electronics manufacturing sector in India. Although many companies are working in design, the country has a long way to go when fabrication facilities comes.

“Apart from a basket of incentives the government has agreed to dole out, chip manufacturers are also likely to benefit from India’s Preferential Market Access (PMA) policy. They should encourage already existing semiconductor players to set up fabs here. While there are a plethora of engineers having suitable skills, evolving the manufacturing sector remains in limbo”

said Dyakar Reddy, an industrialist with 35 years of experience.

Design projects have larger dependency on foreign FABs. But the country has no fabs to manufacture chips. Have you ever wondered where these chips designed in India?

The Government of India has of late realized the importance of the Electronic System Design & Manufacturing sector for the growth of the country’s economy as a whole and is taking steps to build a sustainable ecosystem.

M N Vidyashankar, President, India Electronic and Semiconductor Association (IESA), said,

“In 2015, an US-based chip manufacturing start-up, Cricket Semiconductor entered into an agreement to set up Rs 6,000-crore analog fabrication unit in Madhya Pradesh.”

The Union Cabinet in 2014 approved two semiconductor manufacturing facilities, at a cumulative investment of `63,000 crore.

MeitY Launches Electropreneur Park, Aims to Support 50 Startups & to Create Atleast 5 Global Companies Over a Period of 5 Years
Source: BW Disrupt; August 28, 2016

Initiatives such as ‘Make in India’, ‘Digital India’ along-with ‘Startup India’ launched by Government of India have injected new hopes in India’s electronics system design and product development space. Taking the vision forward, Ministry of Electronics and Information Technology (MeitY), has set-up Electropreneur Park at University of Delhi, South Campus to incubate 50 early stage start-ups and create at least 5 global companies over a period of 5 years. This incubation centre has been set up through a unique consortium of Government, Academia and Industry represented by Software Technology Parks of India (STPI) Delhi University (DU) and Indian Electronics and Semiconductor Association (IESA). Electropreneur Park (EP) has been inaugurated today by Shri Ravi Shankar Prasad, Hon’ble Union Minister of Law & Justice and Electronics & Information Technology. In his speech, Hon’ble Minister laid focus on the thrust being provided by the Government to create conducive environment for promoting electronics manufacturing in the country resulting into acceleration of investment in the sector. Particularly, the need and opportunity for fostering innovation, creation of IPR and development of new electronics products in the country.

Shri P.P.Chaudhary, Hon’ble MoS for Law & Justice and Electronics & Information Technology, Government of India has graced the occasion as Guest of Honour. Hon’ble MoS in his address mention the platforms are being made available for encouraging youth and start ups to undertake entrepreneurial initiatives.

37 mobile manufacturing units generated 1.65 lakh jobs in India in 1 year: Ravi Shankar Prasad
Source: Firstpost; August 29, 2016

India has attracted investment from 37 mobile manufacturing companies in last one year that have generated 40,000 direct jobs and 1.25 lakh indirect employment, IT Minister Ravi Shankar Prasad said.

“We decided to make India a big hub of electronics manufacturing. In the last one year, 37 new mobile manufacturing units have come,”

Prasad said after inaugurating government-funded ‘Electropreneur Park’.

He said that 11 crore mobile phones have been made in the country in last one year compared to 6 crore earlier.

“We have given jobs to forty-thousand people and 1.25 lakh indirect jobs,” Prasad said.

Chinese companies like Gionee and Xiaomi are making their handsets at Foxconn plant in Andhra Pradesh. Domestic companies such as Karbonn, Lava, Micromax, Intex, Jivi, iTel, and MTech too have set up their manufacturing plants in the country.

As per industry sources, Chinese company LeEco will start mobile manufacturing unit on Tuesday.

Prasad said that besides manufacturing electronics product in India, product designing is also important.

He said that government has provided Rs 10,000 crore under Electronics Development Fund to support new entrepreneurs in the field of electronics.

“India imports electronic goods of over Rs 3 lakh crore. By 2020 government aims to bring down import to zero. The Electropreneur Park started on Saturday is a step in that direction,”

Minister of State for IT and Law P P Choudhary said.

Odisha CM Naveen Patnaik Nets Investment Commitment of $13.5 Bn for Startups
Source: Inc42; August 28, 2016

In a recently held Odisha Investors’ Meet, a senior Government delegation led by Chief Minister Naveen Patnaik met over 60 companies and received investment commitments of $13.5 Bn (INR 90490 Cr) for State investments.

The fund will focus on investment in sectors such as food processing, apparel, electronics manufacturing, gems & jewellery and renewable energy.

The meet was held at Bengaluru during August 25-26 and marked participation from industry stalwarts Kiran Mazumdar, Sajjan Jindal, Sachin Bansal along with more than 400 delegates representing various companies and the industry from Bengaluru.

The event marked the launch of The Odisha Startup Policy 2016, formed with a vision to create 1,000 startups by 2020. Under this policy, startups will be provided support, incentives, and assistance at all stages of growth including idea, commercialisation, and marketing. Also, a $3.73 Mn (INR 25 Cr) Startup Capital Infrastructure Fund will be created to support the development of startup ecosystem in the State.

Also, an advance version of Government of Odisha’s industrial portal for land use and services, GO iPLUS was launched during the meet. The platform intends to be a one-stop destination for all queries related to land bank available in the State for industrial use in the vicinity of preferred infrastructural utilities such as airports, port etc. All land parcels are also categorised as per environmental category. A user can also get information about all existing industries operating in a particular cluster.

Govt establishes Electropreneur Park to bolster electronics manufacturing
Source: Business Standard; August 29, 2016

Ministry of Electronics and Information Technology (MeitY) has set up an Electropreneur Park at University of Delhi to incubate 50 early stage start-ups and create at least 5 global companies over a period of 5 years. The park will be managed by Software Technology Parks of India (STPI) and implemented by India Electronics and Semiconductor Association (IESA).

Ravi Shankar Prasad, Union Minister of Law and Justice, Electronics & Information Technology, said,

“Having lost at the time of indusrtial revolution, India cannot afford to miss the bus once again. It has to take lead in the ongoing digital revolution and this alone has the potential to transform India into a vibrant economy. The NDA Government under the leadership of Prime Minister Narendra Modi, has already sown seed for this and introduced programmes like Make in India, Skill India and Stand Up India with the purpose of making all sections of the society equal partners in this game changing initiatives.”

He said academia clubbed with investors and incubates together can expedite the process of transforming India. The government has already set up fund to incentivise such initiatives and would continue to focus on making India a hub centre of incubation, he added.

Improved export outlook to pull manufacturing growth
Source: Business Standard; August 29, 2016

FICCI's latest Quarterly Survey on Manufacturing indicates improved outlook for the sector in quarter 2 of 2016-17 (July-September) buoyed by improved outlook in exports. The survey had earlier indicated a slowdown for the first quarter of 2016-17, which seems to be waning. The proportion of respondents expecting higher growth during the July - September quarter has risen to 55% as against 53% for April - June quarter 2016-17, although, it remains much below the percentage of 60% for January - March quarter of the previous fiscal. The slight improvement in the outlook for manufacturing production in second quarter of the current financial year is attributable to various factors including somewhat better outlook for exports compared to previous quarters, and better outlook on domestic demand front too, noted FicciSurvey.

The survey that gauges the expectations of manufacturers for Q-2 (July-September 2016-17) for thirteen major sectors namely auto, capital goods, cement and ceramics, chemicals, electronics & electricals, food products, leather and footwear, machine tools, metal and metal products, metal forging, paper products, textiles and technical textiles and textiles machinery, has shown slight improvement in manufacturing sector over the last few quarters due to number of initiatives taken by Government in the last few months. Responses have been drawn from 308 manufacturing units from both large and SME segments with a combined annual turnover of over ?4 lac crore.

MediaTek invests Rs 400 crore in One97
Source: The Economic Times; August , 2016

Taiwanese semiconductor maker MediaTek will invest Rs 400 crore ($60 million) or about a fifth of the capital being infused into India's One97 Communications, which runs mobile payment and ecommerce platform Paytm. The deal, which was ratified by the board of directors of Noida-based company on Monday, will see valuation of the company more than double to over $4.8 billion.

Existing investors including Chinese ecommerce giant Alibaba and its payments affiliate Alipay, besides the Delhi-based company's earliest backer venture capital firm SAIF Partners, will provide the remaining capital in the $300-million deal. "With long-haul investors, Paytm is in an incredible position to provide a new paradigm of banking and financial services," said Vijay Shekhar Sharma, founder of One97.

"Even without this capital, we were sitting on a runway of 36 months." One97 raised about Rs 4,400 crore in 2015 from Alipay and Alibaba, who together hold about 40% stake in the company. This latest round of funding also includes a secondary sale of shares of up to $50 million being executed to help Sharma finance his part of the investment in the payments bank — Paytm Payment Bank — that is due to launch operations in October.

Sharma, who was awarded a licence by the central bank to set up a payments bank, is required to own a 51% stake in the new entity. The bank is expected to be launched with an initial investment of up to $100 million.

The investment by MediaTek, a strategic investor with revenue of over $7 billion, will help Paytm expand its distribution network, by bundling the application on smartphones that use MediaTek's chipset.

Parrikar to visit Boeing Philadelphia facility to review manufacturing of Chinook heavy lift choppers for India
Source: Defence Aviation Post; August 29, 2016

Defence minister Manohar Parrikar, currently on his second visit to the US in eight months, will be visiting the Boeing’s facility in Philadelphia on August 31 to get an update on the CH-47F Chinook heavy-lift helicopters being manufactured for India. In order to scale up Indian Air Force capabilities, the government had last year placed order for 15 Chinook helicopters along with 22 AH-64E Apache Longbow attack helicopters, also being manufactured by Boeing.

The order is valued at over US $2.5 billion. Alongside, the private sector in India will benefit as the deal will bring around $600 million into the defence and aerospace sector as offset for the deal. The Chinook helicopters are slated to be inducted into the Indian Air Force in 2019.

The US is currently the biggest supplier of weapons and military equipment to India, having won orders worth over $13 billion during the last seven years. The induction of Apache attack and Chinook heavy lift helicopters will prove to be a game changer for the capabilities of the Indian Air Force.

This helicopter is considered to be the most lethal helicopter across the world.After operating the Russian make, Mi 35 for years, India has ordered 14 of these latest configuration machines from the US in September 2015.

These helicopters have a day and night visibility and are equipped with laser and infra-red systems. The Apache is a 2-pilot dedicated attack helicopter that fires the Hellfire missiles besides its arsemal of 70 mm rockets and an automatic canon.

LeEco to invest $7 million for local manufacturing; partner Compal Electronics makes India entry
Source: The Economic Times; August 30, 2016

LeEco plans to make 400,000 smartphones a month in India by the fiscal end as it begins making phones locally in partnership with Taiwan's Compal Electronics, yet another boost for the government's Make in India program. The Chinese internet ecosystem company will start with making 60,000 Le 2 smartphones on a monthly basis, from a 200,000 sq ft assembling facility in Greater Noida immediately.

"We're investing about $5 million in the plant and another $2 million will be used for automating it, while Compal will make its own significant investments,"

Atul Jain, chief operating officer of smartphone business at LeEco India told ET Tuesday, hours before IT and law minister Ravi Shankar Prasad remotely inaugurated the facility.

For contract manufacturer Compal Electronics, the Greater Noida facility will be its first step in India, and fifth globally after Poland, Mexico, Brazil and China.

Compal is one of LeEco's global manufacturing partners and makes more than half the phones sold by the company. The erstwhile PC manufacturer also makes iPhones and iPads for Apple, since last year.

Last year about four million LeEco smartphones were made for China market, and this year the target is to nearly quadruple that number with sales targeted in India, China and possibly the US. The company has sold over a million units since its launch in January this year? in India?

'Goods in 6 manufacturing sectors face inverted Customs duty'
Source: Business Standard; August 30, 2016

Products across six manufacturing sectors, including capital goods, cement and electronics, face an inverted Customs duty structure that erodes competitiveness against finished product Importswith a lower levy and discourages domestic value addition, says a report.

According to the document prepared by industry body Ficci, various products across six manufacturing sectors face duty inversion. Put simply, this means the import duty applicable on the finished product is lower than that of the raw material or intermediate product.According to the document prepared by industry body Ficci, various products across six manufacturing sectors face duty inversion. Put simply, this means the import duty applicable on the finished product is lower than that of the raw material or intermediate product.

These sectors include capital goods (like boilers, pressure vessels, etc), cement, electronics and electricals, rubber products (including tyres), minerals and textiles.

The report has been submitted to the authorities concerned, including the Tariff Commission and the department of industrial policy and promotion (DIPP) for necessary action, Ficcisaid.

"It has been observed in six broad sectors that the import duty applicable on the finished product is lower than the import duty on the raw material or intermediate product which discourages domestic value addition. This inversion is not solely because of basic Customs duty, but in some cases as a result of other additional duties," the report stated.

Phones worth Rs 94,000 crore to be made in India in FY17: Ravi Shankar Prasad
Source: The Economic Times; August 30, 2016

The government is going to transform the 'Digital India' programme into a more segment-focused one with smarpthones playing a crucial role at the core, union minister of IT and electronics Ravi Shankar Prasad has said.

"We are going to make a further focused programme... secretary [Aruna Sundararajan] herself working it out to make it more focused, centralised and segment wise. A lot of success has been achieved and now we have proposed to make it further focused... the entire programme will be known to you shortly,"

Prasad said on at an industry event.

The minister said the government will make digital ecosystem of the country different from others, having a complete integration of mobile phones, Jan Dhan Yojana, Aadhaar and bank accounts.

"We will empower farmers, education, healthcare and to improve quality of life," he added.

Prasad also said that India's mobile manufacturing industry will be worth Rs 94,000 crore by this fiscal end, having increased by a dramatic 185 per cent over the last year in value terms at Rs 54,000 crore.

ISBA to set up $40 mn seed fund
Source: Business Standard; August 31, 2016

Indian STEPs (science and technology entrepreneurs park) and business incubators association (ISBA) plans to set up a $40 million fund aimed at seed investing. The fund will be launched at the XI ISBA 2016 conference in the month of September.

The $40 million will have 50% contribution from incubators that come under ISBA and India Electronic and semiconductor association (IESA) and the rest of the funds will have contribution from HNI's based out of the US and serial entrepreneurs.

"We have to register the funds with SEBI but even before that we have received commitment from our foreign partners for the $20 million. Though we have seen a spurt in VC activity in India, there is little risk capital available at the seed funding level. With this corpus we want to address that segment,"

said Rajendra Jagdale, director general, Science and Technology Park and president ISBA.

On an average the fund intends to invest Rs 1 crore per startup. And will look at an exit post three years. The fund life-cycle will be for 10 years. The fund will look at taking stake of upto 30% in startups.

Jagdale also added that by inviting private investors to be part of the fund will allow them to increase their funding in startups.

"Though we are given funds from DST there is limitation. The upper limit of funds from government is Rs 50 lakh. But sometimes this is not adequate for companies in hi-tech and pharma segment were the initial investment amount needs to be higher," added Jagdale.

Compiled by IESA Research

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