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11th Anniversary

‘Revive demand to boost manufacturing sector’
Source: The Hindu Business Line; January 21, 2017

The government should enhance the purchasing power of common man by leaving more money in his hands and revive overall demand to boost manufacturing sector.

The eminent speakers at the BusinessLine ‘Count Down to Union Budget, 2017’ on Thursday were unanimous in their call for improving ease of doing business, reviving demand and renewed focus on sectors that help in job creation.

Seshagiri Rao, Joint Managing Director, JSW Steel, said the Budget should tweak the tax structure to help consumers spend more. This will not only spur demand but also improve the capacity utilisation of manufacturing sector, which has expanded production capacity in anticipation of robust demand.

Of ?16.33 lakh crore of taxes government collect annually about 65 per cent is mopped up through direct taxes while the rest comes from indirect taxes.

Globally, more taxes are collected from indirect tax payers leaving money in the hands of consumers to spend, he said.

The GST rate of 17-22 per cent being discussed is much high and with so many State government taxes, levies and royalty on mining kept out of GST will push of cost further, said Rao.

Key challenge

K Krishna Moorthy, Chairman, India Electronics and Semiconductor Association, said the Budget should focus on providing special incentives to sector that can generate employment, the plank on which this government came to power.

Ravi Gururaj to lead TiE Bangalore, with new charter
Source: The Times of India; January 21, 2017

After spearheading IT industry body Nasscom's startup programme for nearly four years, Ravi Gururaj is moving away from it to take on the leading role at one of India's earliest entrepreneur networks, The Indus Entrepreneurs (TiE) Bangalore.

Gururaj, who has had successful stints as an entrepreneur, both in the US and India, is credited with having given Nasscom a fresh and younger face by intensely energizing its startup acceleration and lobbying programme. He did it to an extent that it almost overshadowed Nasscom's traditional IT services platform.

Gururaj moves to TiE at a time when Bengaluru is flooded with entrepreneur programmes, incubators and accelerators. TiE is a global body with 60 chapters in 17 countries and was started in the US by Indian-origin entrepreneurs to help other entrepreneurs in their community. In India, it started with the Bengaluru chapter in 2000. It was prominent in its early years, but was crowded out by the many others, including Nasscom's 10,000 Startups programme, iSpirt and corporate accelerators, that emerged in the past decade.

Gururaj says TiE has to find a unique proposition for itself, and find ways to benefit from its global presence. Mentorship and acceleration programmes currently tend to focus on ventures that have found some traction, those that are in technology, and those that are looking to raise venture capital (VC) funds.

India, UAE discuss trade, strategic partnership
Source: Nagaland Post; January 21, 2017

India and UAE held their first strategic dialogue Friday ahead of Abu Dhabi Crown Prince and deputy supreme commander of the armed forces of UAE Sheikh Mohamed bin Zayed Al Nahyan’s visit to India next week.

Sheikh Mohamed will be the chief guest at the Republic Day celebrations on January 26.

During the meeting on Friday, according to a statement by MEA, the two sides discussed a number of issues ranging from cooperation in the areas of trade and investments to expanding the bilateral cooperation to new areas under the strategic partnership. These new areas include energy security and renewable energy, defence and security, electronics and information technology and space.

“The meeting provided a timely opportunity to prepare for the forthcoming State visit of the Crown Prince of Abu Dhabi as the Chief Guest at the Republic Day celebrations, 2017. The two sides agreed on a number of new initiatives to further strengthen the bilateral cooperation and on signing of fresh instruments of cooperation,” said the statement. Issues related to counter-terrorism were also discussed in the dialogue. Terrorism remains a focus area for the two countries even though UAE recently denied reports in the Indian electronic media that it had seized Indian fugitive Dawood Ibrahim’s property worth Rs 15,000 crore.

The meeting was co-chaired by MJ Akbar, MoS for external affairs and Anwar Gargash, MoS in ministry of foreign affairs of UAE. The two sides were represented by strong delegations drawn from a number of relevant ministries and departments.

Curbs on outsourcing may hit US economy: Nasscom
Source: The Hindu; January 22, 2017

The premier trade body plans to take a delegation to the U.S. in February in an attempt to reach out to the Trump administration

India’s IT industry has warned about the adverse impact that curbs on outsourcing will have on the U.S. economy, which lacks high-skilled workers.

The country’s premier trade body, Nasscom, will be taking a delegation to the U.S. in February in an attempt to reach out to the new administration. U.S. President Donald Trump had promised to follow a ‘Buy American, Hire American’ policy in his inaugural speech on January 21 in Washington.

“The critical thing for this industry is high-skilled workers and the fact of the matter is that those high-skilled workers are not available in the U.S… If the agenda of creation of jobs needs to be pursued, we feel that current windows will need to be kept open to get the requisite skilled workers,” R. Chandrasekhar, president of National Association of Software and Service Companies or Nasscom told The Hindu.

Mr. Chandrasekhar said that the Indian IT industry provided services to American companies, which helped them to be competitive in the global market.

“In the U.S., the job creation engine is only corporate America. There is no other way that U.S. economy can generate jobs. And therefore, to keep corporate America fighting fit, ensure that it remains globally competitive, ensure continuous increase in productivity, these services are needed. If you need these services, you need skilled people.”

Foxconn may build $7 bn plant in US
Source: India Live Today; January 23, 2017

Taiwan technology giant Foxconn has announced that it was considering setting up a plant in the US with an investment of $7 billion.

The world’s largest contract electronics maker Company’s chairman and chief executive, Terry Gou, on Sunday said the investment would likely generate thousands of jobs, if it goes ahead, the BBC report.

The plan comes after US President Donald Trump in his inauguration speech reiterated his “America First” agenda meant overturning international trade treaties.

During his campaign, Trump had repeatedly threatened high import tariffs in order to encourage American and foreign companies to move production to the US.

He singled out China as a significant cause of lost manufacturing jobs in the US.

Foxconn — formally known as Hon Hai Precision — has most of its factories in China where it assembles Apple’s iPhones. Last year, the firm took over Japanese electronics veteran Sharp and the display-making investment being considered in the US is thought to be under the new Sharp unit.

The White House website, updated after Trump’s inauguration, makes clear that the new administration will pursue plans to alter trading relationships with Asian countries.

Trump also said he will renegotiate the North American Free Trade Agreement (Nafta) with Canada and Mexico.

'Make in India' = IP (Manufacturing+Innovation)
Source: Business World; January 23, 2017

India's priority is to ensure that 'Make in India' becomes a global success story. And there is no doubt that we need to put more focus on high-value creation that will take our economy to a higher trajectory and in league with the developed world.

Today government, industry and policymakers, have joined hands to look for India's next stage growth, focusing on strategies that can foster and enhance the innovation capacity in the nation. The sound linkage between innovation and competitiveness should be exploited to stimulate the dynamics of innovation. Only a stable IPR culture can ensure India as the preferred investment setination, drawing in more investments, specifically from FDI.

We believe there is a need to create a robust IP ecosystem in India and protect the IP of its companies. It will also provide a stable framework for multinational companies wanting to enter India.

The National Intellectual Property Rights policy was approved in May, 2016. It is a "first of its kind" policy for India, covering all forms of intellectual property together in a single framework.

Since the days our Prime Minister announced the 'Make in India' initiative, we have seen waves of India Manufacturing announcements.

'Electropreneur Park' (EP), a joint initiative of MeitY, IESA, University of Delhi and STPI, has provided the industry a direction to nurture product innovation in India. We have seen the industry has come forward and helped the incubated startups (at EP) with the initial round of funding.

Hike customs duty on import of electronic goods to boost local production
Source: Business Standard; January 23, 2017

The consumer electronics industry in India is one of the promising markets for investors and has a compounded annual growth rate of 9.5 percent from 2015 till 2021, as reported by the industry body, Consumer Electronics and Appliances Manufacturers Association (CEAMA) and Frost and Sullivan. The growth will be stimulated primarily by the increase in demand in semi- urban and rural pockets of the country.

In 2016 the industry has witnessed a growth of (10-15 percent) as compared to 2015. With the increase in internet penetration across the country and roll out of 4G network, electronics industry players have a lot to innovate with their product line up.

According, to the study undertaken by Assocham and EY the industry is expected to touch $ 75 billion by 2017 from $ 61.8 billion in 2015. The government is working to push infrastructure development, locomotive and energy which poses a significant opportunity for rapid expansion of the domestic electronics industry.

The 2017- 18 budget will be first of its kind for several reasons. It will be for the first time the budget will be one comprehensive one, including the railway budget and it is a month before it is introduced. The Indian economic condition was conducive for majority sectors owing to the government policies. The Make in India vision, GST, Seventh Pay Commission for the government employees and good monsoon have stirred growth opportunities for all players.

Budget 2017: Services Will Create More Jobs than Manufacturing, Says Biocon Chief
Source: Bloomberg Quint; January 23, 2017

We have to stop kidding ourselves that manufacturing will create jobs in large numbers," says Kiran Mazumdar-Shaw, chairman and managing director of Biocon Ltd. In a free-wheeling chat about the economy and Budget 2017, Shaw says creating new jobs is the biggest economic challenge facing India's policymakers today. Edited excerpts.

Do you think the government has achieved the goal of creating enough new jobs in the economy?

I think this is a huge challenge for our economy. We keep talking about jobs and I don’t think there is enough thought going into what is going to happen to us as an economy over the next 10-20 years. I think we really need to focus on where the jobs are going to be created in the next 10 years. And, I am afraid, there is not enough focus on what kind of jobs are we going to create.

It is very sad that wherever we talk about jobs, everyone only thinks about IT jobs. They are not going to create the 15 million jobs that we are talking about.

But yet, I think IT does have a very big role to play in creating more jobs. They are going to be enablers, not necessarily creators of those millions of jobs. For creating those jobs, you have to look at aspects of skilling capabilities.

You recently said ‘we are in a period of jobless growth’. Will the policy thrust on manufacturing create a large number of jobs?

Manufacturing today is about automation. So you are not going to be able to create those huge numbers of jobs.

Imports are eroding component supply base in India in consumer electronics
Source: Business Standard; January 24, 2017

The budget 2017-18 is going to be unique in many aspects. It will be for the first time that Railway Budget will be merged with the General Union Budget, and will be announced a month in advance, ie on February 1, 2017. GST all set to be implemented in July 2017 and the effect of demonetisation still circling in the market, expectations with the budget this time around are considerably high as compared to previous years.

The past year started off with the promise of being one the most profitable financial year for the consumer durable industry in almost four years. Implementation of the 7th pay commission, good monsoon and increase in buying power of the citizens came as a goodwill bearer for the industry which further ascended its flow into the festive season. Though government’s decision to ban the higher denomination currencies affected the ACE (appliances and consumer electronics) industry to a large extent.

A commendable decision with a motive to curb black money caused significant liquidity issues within the economy. For a sector which still operates 80 percent on cash took a toll in its sales in the aftermath of the decision, 40 percent to be exact. The move has affected the sector in the second half of the third quarter and might have withdrawal effects too. However we expect the government to address this issue and implement relevant measures to minimise the impact of demonetisation.

RS Components to invest $ 15 million in India
Source: Voice & Data Online; January 24, 2017

RS Components has announced the opening of their innovation hub, a new ‘Electronic Centre’ in Bangalore. The high service level supplier of electronic components and tools plans to invest close to $15 million over the next two to five years at the Bangalore centre.

The new 2000 Sq feet office in the heart of Bangalore has been set up to support electronic design engineers and manufacturers in the region. The compay also plans to set up a warehouse which will enable RS Componentsto undertake “next day delivery” to its customers.

The Bangalore Centre will have technical marketing and support teams, specialized sales force that will focus on specific industry verticals like IoT, Medical Electronics, Aeronautics, Automotive and R&D sector.

Speaking at the launch of the Electronic Centre, Mr.Keith Rice, Head of Emerging Markets, RS Components Worldwide said, “Our Electronic Centre at Bangalore is a great opportunity to bespeak RS’ strong value proposition in the light of our technical expertise and tailor made solutions that create a huge difference in the day-to-day life of a design engineer.”

Talking about the potential of the Indian market and RS India’sgrowth Mr Keith Rice added, “RS envisages India as one of the most promising and high potential markets. The pace at which the RS India story is accelerating will soon turn out to be a significant advantage for them on a global landscape.”

Maximum jump in new Indian companies that call UP their home
Source: Economic Times; January 24, 2017

Which state do you think saw the maximum jump in the number of new companies being formed over the past five years? Delhi? Wrong! Andhra? Wrong again!... It’s Uttar Pradesh, although it did not record any stellar growth in its gross state domestic product (GSDP) or manufacturing.

Close to 9.2% of new companies incorporated in India in FY16 were registered in UP last year; this was 4.5% six years ago, according to information compiled by Registered Companies, a data analytics firm specialising in corporate due diligence. Most of these firms, as per numbers available with the Ministry of Corporate Affairs, are private companies with a registered capital of Rs 1 lakh.

However, considering newly-incorporated companies as a lead indicator of business growth may be misleading.

During this period Maharashtra’s share in the total number of incorporated companies fell marginally from 18.6% to 17.8%, Gujarat’s fell from 5% to 4.3%, while Karnataka witnessed a rise from 5.4% to 8.8% and Tamil Nadu from 6.2% to 7.6%.

However, between FY2012 and FY2015, UP’s GSDP (at constant prices) grew at a compound annual growth rate of 4.9% against a national growth of 6.5%. The manufacturing contribution to state GDP in FY15 was 10.6% –– nearly half the national average.

A closer look at the companies’ data shows that top sectors in which new companies have come up are real estate, construction and IT.

Videocon launches solar energy air conditioner
Source: Business Today; January 24, 2017

Videocon, the consumer electronics and home appliances company, on Tuesday unveiled a Hybrid Solar Air Conditioner (AC). The company claims it's the world's first AC to run on solar energy.

"With the ability to be operated with naturally obtained energy, Solar Hybrid AC is the future, " said Akshay Dhoot, Head of Technology and Innovation, Videocon at the product launch.

Videocon Hybrid Solar ACs eliminate the need to consume electricity from the grid, allowing 100 per cent power savings and a lower carbon footprint in contrast to the energy guzzling conventional ACs. However, if the battery runs out of charge, it automatically shifts to regular electricity supply.

Also, the surplus energy generated via these solar ACs can be exported back to the grid to receive bonus payment as per the government regulations. The company also has plans to make its entire AC portfolio compatible with solar energy, added Dhoot.

"Its solar panel comes with 25 years' of linear power output warranty and 10 years of panel warranty. The newly launched AC provides efficient cooling without any fluctuations with the least load on grid," said Sanjeev Bakshi, COO - AC Division, Videocon.

With the launch of this eco- friendly AC range, Videocon aims to capture 13 per cent% of the AC market in India by end of FY 2017 from the current 9 per cent, said Bakshi. The AC sector is expected to grow by 25 per cent to 5 million units in 2016/17.

'Make in India' meet's focus should be on investments: state
Source: Deccan Herald; January 25, 2017

The state government has urged the Centre to make arrangements to ensure that the ‘Make in India’ conference it is proposing to hold in Bengaluru in February is investment-driven. The conference is being organised by the Department of Industrial Policy and Promotion (DIPP)?under the Ministry of Commerce and Industry. The state government, which will be co-hosting the event, is keen that the two-day conference, scheduled to begin on February 13, is investment oriented. The event will be held at Hotel Lalith Ashok.

“We don’t want the event to be a roadshow wherein memoranda of understanding are signed and nothing progresses further. At a recent meeting with DIPP officials, we told them that there should be some concrete outcome from the event,” IT-BT Minister Priyank Kharge, who attended the meeting said. Launched in 2014, Make in India is an initiative of the Centre to encourage multinational as well as national companies to manufacture their products in India.

Kharge said the state has the ecosystem to attract investment and needs to be tapped. “For instance, 2,387 entrepreneurs have registered with our startup cell, while the number of registrations with Startup India has not even crossed 1,000,” he said.

According to an official source, the conference will have G2B (government-to-business) and B2B (business-to-business) activities in several sectors, including aerospace and defence, biotech and pharmaceuticals, precision tools and heavy engineering, electronics, hardware and electricals, manufacturing and startups, automobiles and auto components.

The 'Make In India' Initiative
Source: BW Businessworld; January , 2017

The Indian market has always been an appealing one for all brands, especially the smartphone industry, since it recently received more space for growth spurred by various initiatives from the Central and State Governments. Consequently, the smartphone manufacturing sector is witnessing a wave of unprecedented growth. Thereby, it seems more promising than ever, thanks specifically to the Centre’s ‘Make in India’ initiative. Presently, India has around 280 million smartphone users. It is expected to have a compounded annual growth rate of 23 per cent through 2018 and would account for 30 per cent of global growth during this period.

Indian consumers are highly price sensitive, preferring a brand that offers the latest innovative technology in the most affordable price range. To cater to this huge demand, it becomes necessary for companies such as Meizu to manufacture the best quality products in a reasonable price range that meet customer requirements. Undoubtedly, if any company begins manufacturing products indigenously, it allows them a competitive edge by reducing overall production costs. Meizu believes the Central Government has launched programmes such as ‘Make in India’ in order to establish the manufacturing sector in the country. It seems that soon India will witness a boom of global industries developing their units here to capture the largest market in the world.

When one witnesses the kind of offerings from the Government itself in the form of ‘Make in India’, which aims to improve the economic condition of its citizens and provide the best products to them, then it becomes our duty also to support such an ambitious initiative.

Institutes like NIEIT will help Rajasthan in IT and electronics sector, says Union Minister
Source: Tech2; January 25, 2017

Union minister P P Chaudhary today said that institutes like NIEIT will help Rajasthan grow in the electronics and IT sector and contribute to India’s digital ambitions. The union minister of state for electronics and IT further was in the city to take part in an event here. Rajasthan has made commendable progress in contributing to India s digital dream, he said.

More than 40,000 students of the state are connected with E-Mitra’s common service centres, which is an achievement itself, said Chaudhary. He said his ministry wants the state to grow by leaps and bounds in electronics and IT sector and institutes like National Institute of Electronics and Information Technology (NIEIT) are established here.

NIEIT has an important role in chasing digital India dream, digital literacy, Make in India and skill India. “The institutes have worked tremendously towards digital literacy, and we want to increase NIEIT existence in other states like Rajasthan,” he added. The focus towards IT and electronics sector is part of a larger push under Digital India where government is trying to build infrastructure that leverages latest technology. States like Kerala and West Bengal are building up databases to make sure that the people in those states can benefit from technology.

Electronics cluster coming up in Bhiwadi
Source: The Hindu Business Line; January 26, 2017

Minister of Electronics and Information Technology Ravi Shankar Prasad is going to launch electronics cluster at Bhiwadi on Saturday, where around 19 companies will be setting up facilities at an investment of ?600 crore.

“Around 50 acres of land will be utilised for setting up the facilities in the first phase and 50 acres in the second phase in future,” sources closed to the development told BusinessLine.

According to the sources, the 19 companies that are investing in the cluster include Fiem Industries (known for electrical lightings), Deki Electronics (known for polyster film capacitors for electronic items), Elin Electronics (known for designing and manufacturing of tools, metal parts, plastic parts and motors) and Sahasra Electronics (known for PCB fabrication, lightings).

All these investors are home-grown companies and are part of the Electronic Industries Association of India (Elcina), which is helping the companies to set up their manufacturing facilities in a cluster so that they can get better management in terms of logistics, etc.

“Around 30 acres of the total land will be used for setting up the manufacturing plants and the rest would be utilised in building lanes, sewage and green areas,” an official at Elcina said.

Apart from Elcina, the government is partnering with a lot of other associations to make companies set up their facilities in the ‘Electronic Cluster’.

According to Prasad, the government is looking at 18 electronics manufacturing clusters in 400 towns and cities in the next few years.

Compiled by IESA Research

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