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  IESA WINWire June 11 - June 17, 2016 for Subscription click here  
11th Anniversary

Need for vibrant free trade pact to boost ties, says Korean envoy
Source: The Hindu Business line; June 11, 2016

Large conglomerates as well as small and medium enterprises from the Republic of Korea are keen on investing in India as the climate turns more ‘conducive and attractive,’said Cho Hyun, the country’s Ambassador in India.

“Many big-ticket projects are in the pipeline. Though I cannot name them, they involve huge investments,”

he told Business Line in an interaction here.

Reminding that Korea has been a big investor in manufacturing sector (automotives, electronics and white goods) in the last two decades, Cho Hyun said Hyundai, Samsung, LG etc., not just manufacture but also export their products in big numbers.

The business community is elated over the ‘Make in India’ and Skill India programmes. The cooperation between the two nations will move up with the investor-friendly policies being unveiled by the government. Korea has been doing these things for years and reaped the benefits, the ambassador said.

Asked for a growth figure for the bilateral trade from the current $19 billion, Hyun, who was in Hyderabad to promote the Korean Caravan, said,

“It would be meaningless to set targets, since we are talking about very big deals in the offing.”  

Electronics industry can meet Apple's wish list on purchase assurance: IESA
Source: The Financial Express; June 12, 2016

Indian electronics industry is ready to fulfill components wish list of Apple for making iPhone in the country if the smart devices major provides purchase commitment to local firms, says industry body IESA.

“If government says fall in line, industry associations are prepared to enter into agreement with Apple and say tell us what your wish list is, we will fulfill it in next 3, 6, 9 and 12 months,”

India Electronics & Semiconductor Association President M N Vidyashankar told PTI.

Apple has submitted proposal for setting up single brand retail stores in the country but has sought exemption from the local sourcing norms as the US-based giant makes state-of-the-art and cutting edge technology products for which local sourcing is not possible.

The Finance Ministry has rejected relaxing the 30 per cent domestic sourcing norms, as sought by iPhone and iPad maker as a pre-condition for bringing in FDI to set up single-brand retail stores in the country.

Govt, corporate need more inclusive dialogue on Smart Cities: Mediatek
Source: Express Computer; June 12, 2016

India is on an upward trajectory towards achieving a significant level of economic success within this decade.

Most market experts agree that one of the core drivers for this rapid expansion is owed to the burgeoning field of technology. From initially being perceived as a Business Process Outsourcing (BPO) hub, the country has emerged as a strong contender that is able to provide world class solutions to an array of fields that include aviation, retail, banking and cybersecurity. It has also been able to churn out a wealth of offerings towards achieving a connected world, where Machine to Machine (M2M) compatibility, cloud storage and retrieval and intelligent data analysis are redefining how urban and rural populations carry out their daily lives. From this abundance of technological output, the national government has envisioned a bolder construction, which will significantly help to bolster resources and ensure a more comfortable and productive existence for people living across different locations. The term ‘smart city’ is broadly defined as a highly advanced urban ecosystem, with state of the art infrastructure, sustainable real estate, point to point connectivity across all technological platforms, which ensure non-stop communications between all stakeholders that include the general public and government.

Showcasing Belagavi’s potential for IT and electronics
Source: The Hindu; June 13, 2016

A one-day conference on “IT and Electronics” aimed at showcasing the potential of Belagavi for the promotion of IT and Electronics Clusters on the theme, “Buzzing Belagavi-The Next Global Technology Hub”, has come as a fresh initiative to attract global investments in these two specific sectors in this tier two city of North Karnataka. The conference will be held at the Suvarna Vidhana Soudha on Friday. The event is being hosted by the Department of IT, BT and Science & Technology, and supported by Karnataka State Small Industries Development Corporation Limited, along with the Belagavi district administration, Karnataka State Electronics Development Corporation Limited (KEONICS) and National Small Scale Industries Association (NSIC). Leading industry associations such as NASSCOM, FICCI, IESA, CLIK, FKCCI, the Belgaum Chamber of Commerce and Industries, NKSSIA, TiE–Hubbali, KCC&I, BITA and Deshpande Foundation are also among the organisers. In addition to sessions and an exhibition, there will be a special tutorial session for engineering students in second and higher semesters on “Internet of Things: Basics and Application for Students”. Announcing this at a press conference here on Tuesday, Regional Commissioner N. Jayaram said that over 30 industry leaders and over 300 delegates representing more than 150 organisations from cross sections of IT, ITeS, Hardware and Electronics sectors would attend.

Expression of interest for IT park this week
Source: The Times of India; June 13, 2016

Madhya Pradesh State Electronic Development Corporation Limited (MPSEDC) would be inviting expression of interest (EOI) by this week for the upcoming IT park situated at electronic complex. The IT Park is aimed at generating employment for 2,000 techies and is slated to become operational before Global investors summit (GIS) 2016 which will commence from October 22.Official sources claim that apart from jobs for techies, opportunities would also be created for non-technical positions.

"We are planning to speed up the project and to make it operational before GIS. Recently, Indore has developed its image as an emerging IT hub and we believe this would act as a platform for city-based firms and create an identity for them,"

said M Silvendran, director, MPSEDC.

Spread over an area of 1.47 lakh square feet at the electronic complex area, the IT Park aims to boost electronic software design and manufacturing (ESDM) sector in state. The structure consists of five floors (ground plus five) with each floor covering an area of 20,000 square feet.

To offset disability and attract investments, electronic manufacturing, modified special incentive package scheme (M-SIPS) was notified by the Central government. The scheme provides capital subsidy of 20 per cent in SEZ and 25 per cent in non-SEZ for the units engaged in electronics manufacturing.

Ringing Bells claims to deliver its Freedom 251 smartphone from June 28
Source: DNA; June 13, 2016

Ringing Bells, a little-known company that ran into controversy after announcing a Rs 251 'smartphone', on Monday claimed it will start deliveries of the handset to customers from June 28. Deliveries will start to customers who have registered for buying the phone, Noida-based company's Director Mohit Goel said.

"We will start shipment of Freedom251 from June 28 to customers who paid for it earlier on COD (cash-on-delivery) basis,"

he told PTI.

Ringing Bells President Ashok Chaddha had explained earlier that the manufacturing cost of the phone was about Rs 2,500, which had to be recovered through a series of measures like economies of scale, innovative marketing, reduction in duties and creating an e-commerce marketplace.

He had said that the company would make phones in India that would lead to 13.8 per cent savings on duties and further save on cost by selling it online. The phone was to be manufactured in Noida and Uttaranchal.

"Two plants will be set up for Rs 250 crore each with a capacity of 5 lakh phones. The money will come in the form of debt and equity (1.5:1)," Chaddha had said.

However, industry players had expressed doubt over the claim. Telecom Minister Ravi Shankar Prasad too had asked the Department of Electronics and IT to look into the matter.

Foxconn looks at Odisha's Gopalpur for setting up unit
Source: Business Standard; June 14, 2016

Lately, Foxconn Technology Group, the world’s largest contract electronics manufacturing company, is considering Odisha, among others, to set up its manufacturing facility. In 2015, Foxconn had announced it would set up 12 factories in India, creating one million jobs. A team from Foxconn has already visited the industrial park at Gopalpur where Tata Steel is the anchor tenant. The industrial park spreads over 3,500 acres of land.

“Foxconn has visited the industrial park at Gopalpur and has shown interest to put up a facility. The company has asked for 1,000 acres of land. The location has surplus land and it can be offered to Foxconn,”

said Pranab Prakash Das, Odisha's minister for electronics and information technology.

It needs to be mentioned that Foxconn’s engagement with the Odisha government is still nascent and the company is yet to spell out the scale of investment or the range of products it intends to manufacture in the state. The state government considers Gopalpur as an ideal port-based location for Foxconn’s manufacturing unit. It will also offer it the advantage of proximity to the Visakhapatnam port.

“Foxconn officials had evinced interest in visiting Odisha and explore the opportunities during a state delegation visit to Taiwan to attract investments in the electronic system design and manufacturing sector in October 2015,”

said an industry source.

Government in talks to sell Nokia’s Chennai plant to Foxconn, talks held ten days back
Source: YourStory; June 14, 2016

On Tuesday, The Economic Times reported that government representatives from New Delhi and Tamil Nadu met Foxconn’s founder Terry Gou, ten days ago, to potentially sell Nokia’s Chennai factory. The meeting was to revive operations at the 212-acre facility situated at the outskirts of Chennai. Earlier the Chennai factory which produced 15 million handsets a month and employed staff of 12,000, was left out of the Nokia’s devices and service units acquisition deal, owing to an estimated Rs 21,000 crore tax demand on the smartphone manufacturer. In March 2014, the Supreme Court dismissed Nokia’s appeal to de-freeze the asset, hence excluding it from the Microsoft deal in October 2014, thereafter. Further, for Foxconn to take over, it is also essential for revenue authorities and Nokia to figure out on how to relieve the asset from all the tax complications. According to the publication, the groundwork for the revival process had begun a year back with the Department of Electronics setting up a task force to kick-start electronics manufacturing in the country. Amongst them, a key target was to find either a manufacturing consortium or a single buyer to buy the Nokia facility.

Commenting on the issue a senior state government official said in the report that the target is to get Tamil Nadu an early revival by garnering maximum employment, in a way that employers can create around 30,000 jobs.

Royal Philips seeks to make one acquisition in India over next one year
Source: Mint; June 14, 2016

Netherlands-based Royal Philips was one of the first multinational corporations to set foot in India back in 1930. Over the next few decades, Philips India Ltd ruled the consumer electronics market in India. But after the 1990s, it lost out to Japanese, Korean and Indian companies, and its contribution to global revenues also dropped drastically. In the past few years, the company reorganized its businesses in India, shifted focus to health-tech and consumer lifestyle products segments, besides its core business of lighting. The company managed to get back to growth, but profitability remained a key concern. Six months after joining Philips India Ltd as vice-chairman and managing director, Raja Venkataraman, in an interview with Mint, speaks about how the company is trying to boost profitability, increase its contribution to the global pie over the next five years. It is unfortunate that people think Philips is a dead company. The compelling vision that Philips has, I don’t think any other company in the world has that. Globally, there is no other company that managed to make a perfect fusion of prevention, wellness, diagnosis, treatment and home care.

See, Philips is a brand that has touched every Indian at some point, and many points. The affinity for the brand, the trust that evokes, the faith that consumers have never faded ever. Philips is a very strong brand, connotes a lot of trust and faith, and leveraging that to drive health and wellness, right up to the home care, makes immense sense.

Government plans more incentives for mobile parts makers
Source: The Economic Times; June 14, 2016

The government will provide more incentives to push local manufacturing of components in a bid to make India a full-blown mobile components and accessories production hub in the next three to four years, a top official said. Sources say the government, as a part of phased plan, is likely to change duty structures around mobile phone components such as camera module, printed-circuit board (PCB) and keyboards to expand the manufacturing base locally by next year.

"There is a provision to manufacture a few accessories in the Union Budget 2016-17. In the next three to four years' time, India will have a full-scale components manufacturing operational,"

Department of Electronics and IT additional secretary Ajay Kumar said.

Currently, more than 90% of the mobile components are imported in India and the segment relies heavily on shipments from China and Taiwan for handsets manufactured locally.Kumar added that the government is trying to facilitate component-level manufacturing in a phased manner and the initiative could have a multiplier effect in creating new opportunities including employment within the country.

Industry stakeholders say that mobile parts manufacturing is critical for a comprehensive Make in India initiative as local manufacturers principally assemble mobile devices in India by importing necessary components.

Electronic chip plant can meet Apple’s need in 3-4 yrs: HSMC
Source: The Financial Express; June , 2016

Electronic chip company HSMC today offered to meet iPhone maker Apple's local sourcing needs in India, even as the US technology giant is lobbying against any such mandatory requirement for its "cutting edge" products.

“We require customers like Apple. If Apple decides to source 30 per cent of components from India then within 3-4 years semiconductor fab would be ready and provide chips required by it,”

a senior executive from Hindustan Semiconductor Manufacturing Corporation (HSMC) told PTI.

HSMC in partnership with Europe’s largest semiconductor maker STMicroelectronics and Silterra Malaysia Sdn Bhd is setting up India’s only electronic chips plant entailing investment of about Rs 29,000 crore.Electronic chips account for major cost of smart devices.

Apple has submitted a proposal for setting up single brand retail stores in the country but has sought exemption from local sourcing norms, saying it makes state-of-the-art and cutting edge technology products for which local sourcing is not possible.

Less than 8% Indian engineers fit for core engineering roles
Source: The Economic Times; June 14, 2016

Significant efforts need to be made to improve employability in the engineering sector as less than 8 per cent of Indian engineers are employable in core engineering roles, reveals an Aspiring Minds' report. The National Employability Report for the first time this year looked into the employability of specialised and new careers, which are available to engineers, other than core IT and software roles. The nationwide analysis based on a sample of 1,50,000 engineers showed there was a huge gap in skills of engineers, as needed, to work in the large industry.

"There are several problems with regard to employability in core engineering roles. We need to excite students about these jobs. Everyone's focus today is on IT. We want students to design and build things. We need emphasis on the basics, for instance, basic electrical engineering, basic concepts of mechanics and so on,"

Varun Aggarwal CTO Aspiring Minds said.

The government's Make in India initiative aspires to create manufacturing capacity in India and generate 100 million jobs by 2022.

Low employability of engineers, however, will impede the growth of manufacturing in India in a big way and requires immediate intervention, the employability assessment firm said.

Aggarwal noted that students do not have these basic concepts right. There is a huge need of a curriculum revamp and to bring in new teaching methods and technology.

India is inching towards becoming production hub for mobile components, plans incentives
Source: Business Insider; June 14, 2016

The Indian government is planning to make the country a production hub for mobile components and accessories in a phased manner and for this it is giving the required incentives to local manufacturing units.The incentives are expected to include change in duty structures in a phased manner.

"There is a provision to manufacture a few accessories in the Union Budg2016-17. In the next three to four years' time, India will have a full-scale components manufacturing operational,"

Department of Electronics and IT additional secretary Ajay Kumar told ET.

Presently, over 90 per cent of the mobile components are imported in the country from China and Taiwan.The government is mulling to shake up component-level manufacturing, which can dovetail into creating new opportunities.

This is also deemed important for PM Narendra Modi's 'Make in India' initiative.

"A fine balance has to be created in the phased manufacturing program (PMP) to enable the final product assembly industry to fully blossom, so that it can attract the components industry vigorously,"

Pankaj Mohindroo, president of Indian Cellular Association, told ET.

India-US defence ties boost: American companies eye multi-billion dollar deals; defence analysts see ‘Make in India’ benefiting
Source: The Financial Express; June 14, 2016

US recognition of India as a ‘major defence partner’ during Prime Minister Narendra Modi’s US visit comes at a time when America’s leading defence companies are eyeing the Indian market for prospective multi-billion dollar ‘Make in India’ deals. The decision is expected to further boost India-US defence ties and open new channels for US’ defence majors to offer and make their products in India.

According to Pratyush Kumar, President of Boeing India,

“The convergence of the two governments will enhance the cooperation between the two countries at various levels. This increased defence cooperation will lead to the development of a robust defence industry.”

“The move will propel the Indian defence industry’s integration into the global supply chain of major Original Equipment Manufacturers (OEMs), boosting the prime minister’s ‘Make in India’ initiative,”

he told FE Online.

Welcoming the US decision, Phil Shaw, CEO at Lockheed Martin India told FE Online,

“We look forward to collaborating even more closely under Prime Minister Modi’s Make in India, Skill India and Start-Up India initiatives along with the Indo-US Defence Technology and Trade Initiative and to strengthening our partnership in the years ahead.”

Hyderabad's IT exports cross Rs.75,000 crore
Source: The Times of India; June 15, 2016

Hyderabad achieved IT exports of Rs 75,070 crore in 2015-16, a growth of 13.26 per cent over the previous year, the Telangana government announced on Wednesday. IT Minister K. Tarakarama Rao told reporters that Hyderabad's growth in IT and IT Enabled Services (ITES) exports was higher than the national average of 12.3 per cent. The city also created nearly 35,611 new jobs in the sector during the year, taking the total workforce to 407,385.

"Our pro-business policy, high quality infrastructure, cost-effectiveness, cosmopolitanism, presence of institutions like TASK and T-Hub along with an overall pro-active approach has made the state among the top IT destinations in the country,"

he said releasing the annual report of the state IT, Electronics and Communications Department.

The growth in IT/ITES exports during 2014-15 was 15.7 percent with the minister noting the sector's growth came down across the globe.

"We are still above the national average and on course to double the exports to Rs.1.20 lakh crore and jobs to one million in three years,"

he said.

KTR, as the minister is popularly known, said since the formation of Telangana state in 2014, the IT exports have grown significantly.

"This will happen sooner than later,"

he said when asked about the time-frame to achieve the goal of making Hyderabad the number one IT destination in the country.

ASML to buy Taiwan's Hermes Microvision for $3.1 billion in chip sector shake-up
Source: Reuters; June 16, 2016

Chipmaking equipment giant ASML Holdings NV has agreed to buy Taiwanese peer Hermes Microvision Inc (HMI) for about T$100 billion ($3.1 billion) in a deal to boost their firepower in high-tech services for semiconductor makers. The transaction, announced in a joint statement, comes as firms like Taiwan Semiconductor Manufacturing Co, the world's largest contract chipmaker and a client of Amsterdam-listed ASML, seek to step up advanced manufacturing to meet demand from consumer electronics makers.

"The combination will allow ASML and HMI to further integrate and enhance their product offering at an accelerated pace,"

the companies said in their statement.

The growth in IT/ITES exports during 2014-15 was 15.7 percent with the minister noting the sector's growth came down across the globe.

Taiwan-listed HMI's shares jumped by their maximum daily limit of 10 percent early on Thursday, and were last trading at T$1,330. Under terms of the deal, each HMI shareholder will receive T$1,410 per share in cash. That represents a near 17 percent premium to its Wednesday close of T$1,210 before the deal's announcement.

On Thursday, shares of Taiwan-listed HMI rose by their daily limit of 10 percent, and were last trading at T$1,330.

ASML's acquisition of HMI will be part-funded by about 1.5 billion euros ($1.69 billion) of debt, the two companies said.

Compiled by IESA Research

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