IESA WINWire Jan 23 - Jan 29, 2016
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In-principle approval given for NIMZ in Telangana: Nirmala
Source: Business Standard; January 23, 2016

The government has given in-principal approval to set up a national investment and manufacturing zone (NIMZ) in Telengana. It has the potential to create direct employment for 75,000 people and indirect for 1,50,000 persons, Commerce and Industry Minister Nirmala Sitharaman has said in her tweets. "In-principle approval given for NIMZ in Districts: Ranga Reddy and Mehbubnagar, Telangana. Have the potential to create direct employment for 75,000 & indirect for 1,50,000 persons. They shall have a pharmaceutical industry focus," she said. NIMZs are mega industrial zones with world class supporting infrastructure. The National Manufacturing Policy provides for NIMZs -- mega industrial zones with world class infrastructure. The government is offering a host of incentives like exemption from capital gains tax and liberalised norms to promote these zones. The policy aimed at increasing the share of manufacturing sector in the country's economic growth to 25 per cent in a decade from the current 16 per cent and also create 100 million jobs.

Hollande to enhance economic, defence ties with India
Source: Bloomberg; January 24, 2016

French President Francois Hollande is expected to enhance bilateral ties with India ranging from trade and investment, defence and climate change during his 3-day visit apart from participating in the Republic Day parade on January 26. Hollande arrived in Chandigarh, a city designed by a French architect, where he was welcomed by Prime Minister Narendra Modi. "We will build on the ground covered during our previous interactions," Modi tweeted. After paying a visit to the tourist spots, Modi and Hollande will attend the 'India-France Business Summit' here, before flying to New Delhi separately in the evening. Hollande and Modi may give a final shape to the Rs 60,000-crore deal for 36 Rafale aircrafts. The two nations may also agree on co-development of a short range surface-to-air missile (SR-SAM) by the Defence Research and Development Organisation (DRDO) with MBDA of France. Hollande will attend the Republic Day function, the fifth French leader to be a Chief Guest at the Republic Day celebrations on January 26—the maximum number from any country. French leaders had earlier attended the Republic Day celebrations in the national capital in 1976, 1980, 1998 and 2008. "We are honoured & delighted to have him as the Chief Guest for Republic Day celebrations," Modi said.

Airbus Helicopters, Mahindra Defence sign statement of intent for joint venture
Source: The Hindu Business line; January 24, 2016

A ‘statement of intent’ was signed between Airbus Helicopters and Mahindra Defence to cement their Make in India partnership and to affirm their commitment to make military helicopters. The agreement, signed in Chandigarh, in the presence of Prime Minister Narendra Modi and visiting French President François Hollande, is a follow-up to the memorandum of understanding signed last July between Mahindra Defence and Airbus Helicopters to form a joint venture to produce military helicopters in India. Both the companies have already initiated a relationship to produce helicopter parts locally. The joint venture would be bidding for upcoming tenders including the reconnaissance and surveillance helicopter (RSH), naval utility helicopter (NUH), and naval multirole helicopter (NMH) procurements. Simultaneously, both sides are also evaluating potential industrial sites and are screening the existing local supply chain, and are defining initial work packages to be transferred to India, the companies said in a joint statement. The companies are proposing to set up a final assembly line in India, develop tier-1 and tier-2 suppliers and make extensive transfer of technology, with the intent to ultimately achieve 50 per cent indigenous content.

PC makers seek differential duty on IT hardware
Source: The Times of India; January 26, 2016

In order to encourage domestic manufacturing of personal computers, industry body Manufacturers' Association for Information Technology (Mait) has sought extension of mobile phones like differential duty structure on IT hardware. "We have requested government to extend differential duty structure for IT hardware, specifically laptops, desktops, wired and wireless customer premises equipment (CPE)and e-readers, are at par with smartphones and tablets," Mait executive director Anwar Shirpurwala told PTI. Mait represents leading IT hardware companies like Dell, Lenovo, HP, Acer, Cisco, HCL Infosystems and Intel etc. The government in budget 2015-16 had exempted mobile phone and tablet PC manufactures in India from payment of customs duty and excise duty on procurement of all goods required for manufacturing, MAIT said in its submission. To boost local manufacturing of mobile phones and tablets, the government in Budget increased duty benefits for domestic producers of these electronic items. Excise duty structure for mobiles handsets was changed to 1% without CENVAT credit or 12.5% with CENVAT credit, which gave domestic manufacturers a benefit of about 11% over imported phones. The current fiscal year saw investments from manufacturing giant Foxconn in the country while many other mobile phone companies like Gionee, Xiaomi, Lava, Karbonn, HTC, Datawind, started production of their handsets locally.

LeEco to set up R&D centre in India
Source: The Hindu; January 27, 2016

Chinese electronics company LeEco, which recently introduced two new smartphones in India, plans to set up a product development centre and aims to be among the top three players in the smartphone segment by 2017, a company official said. “We believe Indian technical prowess is very high. We would like to give opportunity to them as well as benefit from their expertise,” said Atul Jain, COO of Smart Electronics business at LeEco India. “We have planned very big investments (for India),” he said. LeEco is also planning to set up a research and development centre in India for which it will be hiring 1,000 people by the end of this year. The centre will work on product R&D for India as well as for global markets. Earlier this month, the Indian Cellular Association (ICA) said that Chinese mobile phone firms are looking at setting up a manufacturing base in the country with investments worth $2-$3 billion over the next two years. These investments could also help generate jobs for between one lakh and two lakh people, according to the association. LeEco has sold four million smartphones and three million TVs in China last year — its first year of operations, according to the company. It plans to launch 2-3 more smartphone models in the April-June quarter to expand its portfolio.

Maharashtra fast-tracks land buy for Foxconn unit
Source: The Financial Express; January 27, 2016

Even before Taiwanese electronics major Foxconn makes a formal application for land for its $5-billion manufacturing facility here, the Maharashtra government is almost ready with the promised land.

Most of the required land has been acquired and no major hurdle is expected in acquiring the rest. The reason behind one of the smoothest land acquisitions of recent past is simple — pay market price and if possible a little more, and be a little sensitive to displaced people. The Maharashtra Industrial Development Corporation followed this policy while acquiring land at Talegaon Phase II for Foxconn’s mega electronics manufacturing project. Notwithstanding some skepticism over rehabilitation, farmers were eager to give up their land as compensation was attractive – MIDC is paying Rs 55 lakh per acre. Those who want 15% of their redeveloped land back, compensation is Rs 46.75 lakh per acre. The price MIDC had paid to farmers during 2000-2005 for Talegaon Phase I was Rs 1 lakh per acre. Also, forceful acquisitions did take place then. There is growing demand from private investors for land here and the rate being offered is around R80 lakh to R1 crore per acre.

How Will Startup India Help You?
Source: Dataquest; January 27, 2016

In last few years, India has witnessed boom in the etail or ecommerce sector. Thanks to the startups which manifested risk-taking ability and defied the tradition by adopting innovative ways to run business. Because of their unprecedented feat, India could surpass China for the first time in the race to garner the Foreign Direct Investment (FDI). Ecommerce is one part of the story which certainly boosted the morale of several individuals to experiment. As a result India has seen a wave of startups in many areas. Until now startups took the risk on their own, with little help from the government. Of course, venture capitalist have begun to invest and promote Indian startups. Largely young entrepreneurs have embarked upon the entrepreneurship on their own. However, it is important that this culture is preserved, prevailed and promoted. There is no one better than the government to do so. The Startup India – a visionary program of the Narendra Modi government – can succeed in giving the much-needed boost. The Startup India includes new policies and initiatives that are aimed at making it easier for investors and startup founders to incubate their venture in the country. It is expected that the initiatives can bring a wave of innovative startups in the country.

Lava invests Rs 60 crore to setup new Noida facility, to bolster 4G portfolio
Source: ET Telecom; January 27, 2016

Home-bred handset maker Lava International is investing Rs 60 crore to set-up a new assembly plant in Noida, which it expects to be operational by May this year, as it looks to fulfil the entire domestic demands from locally manufactured products by October. "The upcoming plant will manufacture both smartphones and feature phones. We are investing Rs 60 crore in the new plant," Sanjeev Agarwal, Lava's Chief Manufacturing Officer at Lava International, told ET. He said that Lava has taken a building on lease in Noida, and it is currently equipping it with assembly lines to transform it into a manufacturing unit, which will take care of testing, software and packaging. The company currently fulfills 40-50% domestic demand devices from its local factory, while rest of the demand is fulfilled from Chinese factories. By October, it aims to fulfill the entire domestic consumption from these two Noida factories. The company has so far invested Rs 50 in its existing manufacturing facility in Noida, which has an installed production capacity of 1 million devices per month. With the upcoming Noida facility, Lava aims to achieve 2.5 million per month production capacity. The handset maker also has a repairing facility in Noida itself.

Names of first 20 Smart Cities to be announced today
Source: India Today; January 28, 2016

The government will announce 40 cities each to be developed as Smart Cities as per PM Narendra Modi's plan to develop 100 Smart Cities. The first 20 cities to be developed as Smart Cities will be announced by the government today. There are 97 cities in the Smart City Challenge, and the names of the first 20 winners of the competition will be announced tomorrow, Urban Development Minister Venkaiah Naidu said on Wednesday. These cities will be developed to have basic infrastructure through assured water and power supply, sanitation and solid waste management, efficient urban mobility and public transport, IT connectivity, e-governance and citizen participation. Naidu was addressing about 100 senior officers of Army, Navy, Air Force and civil service, including 25 foreign officials, participating in a course on 'National Security and Strategic Studies' at the National Defence College here.

In the subsequent years, the government will announce 40 cities each to be developed as Smart Cities as per Prime Minister Narendra Modi's plan to develop 100 Smart Cities in the country.

Speaking on challenges and the way ahead for urban development, Naidu said perpetuation of inequities in urban areas has serious implications for national security and hence, the government is committed to ensuring inclusive development under new initiatives like Atal Mission for Rejuvenation and Urban Transformation (AMRUT), Smart City Mission, Swachh Bharat and Pradhan Mantri Awas Yojana (Urban).

Parrikar: Defence PSUs must compete with pvt sector
Source: The Times of India; January 28, 2016

Defence minister Manohar Parrikar on Wednesday asked defence PSUs and the Ordnance Factory Board (OFB) to change their mindsets and be ready to compete with the private sector in the defence production arena. Conferring the defence minister's awards for excellence, Parrikar said such events should not become "decorative PR (public relations) exercises". "Public sector units should compete with the private sector for such awards in the years ahead," he said. India still continues to import 65% of its military hardware and software, making it the world's largest arms importer, because of the shoddy performance of DRDO and its 50 labs, five defence PSUs, four shipyards and 39 ordnance factories, as well as the failure to enthuse the private sector to enter defence production.

Parrikar said the NDA government was trying to indigenize defence production, though it would not be possible to eliminate imports totally. "But I see that the mindset (of PSUs and OFB) has still not changed to the current scenario... changes are required." While Bharat Electronics bagged the 'excellence in performance' and 'best performance in export' awards for 2013-2014, the recipients for 2012-2013 were Hindustan Aeronautics and Bharat Earth Movers Ltd, respectively.

Maharashtra government to formulate electronics policy
Source: Daily News & Analysis; January 28, 2016

After attracting contract manufacturing major Foxconn, the state government is formulating its first electronics policy to woo other players for setting up shop in Maharashtra.

The policy to be unveiled in the 'Make in India' week in Mumbai from February 13 to 18, will grant incentives like higher concessions in VAT to promote investment in the electronics system design and manufacturing (ESDM) sector, which has immense job creation potential.

The state is also looking to support electronics testing centres and electronic hubs and make domestic manufacturing of electronics attractive. The policy is expected to be tabled before the state cabinet soon.

It is estimated that by 2020, the import of electronic goods will overtake the fuel import bill, especially in view of falling oil prices. Around 65% demand for electronic products is met through imports.

"We have been quite late in formulating an electronics policy," admitted a senior state government official, adding that states like Andhra Pradesh, Gujarat and Madhya Pradesh had stolen a march. Electronics manufacturing clusters have been set up at locations near Bangalore, Hyderabad, Bhopal, Delhi and Kochi.

"We are looking to build on the Modified Special Incentive Package Scheme (MSIPS) regime, which grants capital subsidies. The state will grant additional incentives," he said.

Samsung sees earnings dip, warns of tough 2016
Source: Times of India; January 28, 2016

Tech giant Samsung Electronics Co Ltd has warned of possible weaker earnings this year due to softer sales of gadgets such as smartphones, a trend that is also hurting rival Apple Inc and major chipmakers.

The South Korean firm's warning came a day after Apple shares fell more than 6.5%, the biggest percentage drop in two years, as the iPhone maker forecast its first quarterly sales drop in 13 years.

Slowing economic growth in China and weaker emerging market currencies are undercutting sales of electronics ranging from televisions to personal computers, spelling trouble for not only for Samsung and Apple but for their suppliers and the broader industry.

"Broadly weaker IT demand will make it difficult to maintain 2016 profits at the level of the previous year's," Samsung said in a statement accompanying its fourth-quarter results, adding that "challenging business conditions" would remain for the current quarter and last throughout the first half of this year.

Samsung said its October-December operating profit was 6.1 trillion won ($5.05 billion), matching its earlier guidance. Revenue rose 1.1% to 53.3 trillion won, slightly better than the 53 trillion won it guided for.

The maker of Galaxy smartphones and tablets reported a full-year operating profit for 2015 of 26.4 trillion won, compared with 25 trillion won the previous year.

Fast-track task force meeting progressive on Nokia plant revival
Source: Business Standard; January 28, 2016

A meeting of the fast-track task force, formed by the Centre to revive the mobile manufacturing ecosystem, has discussed the issues related to the revival of the mobile handset manufacturing unit which was earlier run by Finnish electronics manufacturer Nokia, in Sriperumbudur, near Chennai. The discussion was productive and it may result in a positive outcome, if the state government also acts accordingly, said a source close to the development. The meeting was very productive and Government of India is totally aligned with the requirements (of the revival plan), and it is now up to the Tamil Nadu government to measure up, said the source. The task force might get to a direction on what is going to happen, within the next one or two weeks. The tax issues are expected to be kept aside and will not come in the way of revival plans. A high-level team of the task force, headed by chairman Pankaj Mohindroo, the national president of Indian Cellular Association, has been set up to look at the issues related to revival of the mobile manufacturing ecosystem in the country and also into the issues with the earstwhile manufacturing plant of Nokia. Earlier in August last year, the task forced requested the Tamil Nadu government to set up a similar committee of the state government to help restart the now- defunct Nokia plant at Sriperumpudur as well as to revive the electronic manufacturing ecosystem in the state.

Lenovo plans to open company-owned stores in India
Source: The Economic Times; January 29, 2016

Lenovo is soon going to file an application with the Centre to open company-owned stores under the liberalised single brand retail foreign direct investment rules, becoming the third major consumer electronics brand to evince such interest after Apple and Gionee. The $46-billion Chinese personal computer-smartphone maker plans to roll out such flagship stores as a single-point destination for all its products including enterprise products, Lenovo India's managing director Rahul Agarwal said. "We will soon file the proposal which is currently under review by our legal team," he said. India will be the first country where Lenovo will have its company-owned stores, which Agarwal emphasised will not act as revenue driver but more as a customer experience zone. "We may also include a service and demo centre, and employ some senior technical people who can offer best customer experience," he said. Lenovo India already has around 1,000 exclusive brand stores run under the franchisee model which contribute almost 40 per cent to its revenue. Agarwal said the company will also revamp its own ecommerce store by April and will aim at driving traffic through various consumer promotions.

Bhubaneswar leads Govt’s Smart City list, Rs 50,802 crore to be invested over five years
Source: The Indian Express; January 29, 2016

Union Urban Development Minister Venkaiah Naidu on Thursday announced the names of the first 20 cities selected to be developed as smart cities under Prime Minister Narendra Modi’s pet project, with Bhubaneswar topping the list followed by Pune and Jaipur. Surat, Kochi, Ahmedabad, Jabalpur (Madhya Pradesh), Visakhapatnam, Solapur (Maharashtra), Davanagere (Karnataka), Indore, New Delhi Municipal Council (Delhi), Coimbatore, Kakinada (Andhra Pradesh), Belagavi (Karnataka), Udaipur, Guwahati, Chennai, Ludhiana and Bhopal are also on the list. Smart cities are projected to be equipped with basic infrastructure and will offer a good quality of life through smart solutions. Assured water and power supply, sanitation and solid waste management, efficient urban mobility and public transport, robust IT connectivity, e-governance and citizen participation along with safety of its citizens are some of the likely attributes of these smart cities. Modi had announced his vision to set up 100 smart cities across the country soon after his government was sworn into power in 2014.

Compiled by IESA Research

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