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Analysis on the Electronics & Semiconductor Sector for 2017: IESA
Source: ELE Times; January 7, 2017

India Electronics and Semiconductor Associations (IESA), Bangalore, on January 06, 2016, shares the 2016 update and 2017 possibilities on the electronics and semiconductors sector, along with its expectations from government on the upcoming Union Budget.

India has become one of the most attractive destination for investments in the manufacturing sector. Global brands like Huawei, Tristone Flowtech Group, Tata Power, LeEco, Zopo Mobile, Panasonic Corporation, Havells India Limited, Airbus, etc. have already invested in India 40 new mobile manufacturing units have been set up in the country, 12 mobile components and accessories units were established

The Foreign Direct Investment (FDI) in electronics manufacturing has reached an all-time high of Rs 123,000 crore (US$ 18.36 billion) in 2016, from Rs 11,000 crore (US$ 1.65 billion) in 2014; on the back of enabling policies of the government and its Make in India initiative.

Design has been the key strength of the Indian ESDM Industry since more than a decade. In 2017, we will witness design getting converted in to manufacturing and enriching the supply chain and the overall ecosystem. In 2017, companies will not only design products to specifications but also consider to overcome potential challenges that could occur during the manufacturing stage and will definitely move up the value chain.

Govt May Tighten Norms to Avail Electronic Manufacturing Sops
Source: The Hindu; January 7, 2017

The government is likely to reduce the timeframe for companies to avail sops in a scheme to boost electronic product manufacturing in the country at a time when tech majors such as Apple are seeking additional concessions to make in India.

While the Modified Special Incentive Package Scheme provides for subsidy on investments made within 10 years of the project getting approved, the revised scheme that will be taken up for Cabinet nod next week is likely to bring this subsidy timeframe down to five years, a senior government official told The Hindu.

The M-SIPS was notified in 2012 for both new and expansion projects to attract investments in electronic manufacturing. The scheme provides for capital subsidy of 20-25 per cent, besides reimbursement of countervailing duty/excise for capital equipment for the non-SEZ units and also reimbursement of central taxes and duties for some of the high capital investment projects.

The scheme was initially opened for three years till July 2015, and was later extended till July 2020. “The reworked scheme is now ready. It will be taken up for approval at the upcoming Cabinet meeting next week,” the official said.

Several approvals under the scheme, considered key to the Modi-government’s Make In India programme, have been stuck for nearly a year due to tussle between the Electronics and IT Ministry and the Finance Ministry after the latter raised concerns over the scheme being ‘open ended’.

To Make In India, Apple Executives to Meet Government Officials on January 25
Source: NDTV; January 8, 2017

A team of the US-based iPhone maker Apple will meet a group of senior officials from various ministries, including IT and finance, on January 25 to discuss its demands for setting up a manufacturing unit in the country.

Officials from departments of commerce, industrial policy and promotion (DIPP), revenue, environment and forest, electronics and information technology (DeITY) will take part in the deliberations.

In a communication to the government, the Cupertino-based technology major has asked for several tax and other incentives, including long-term duty exemptions, to enter the manufacturing sector in India. However, government sources said that the technology major should set up the manufacturing unit in India without seeking any additional support.

As many as 42 companies are making mobile phones in India, including Chinese firm Huawei and Xiaomi, and no firm has approached the government for any additional incentives.

Currently, the government provides support by way of benefits under the Modified Special Incentive Package Scheme (MSIPS) to boost electronic manufacturing.

The scheme offers financial incentives to offset disability and attract investments in the electronics hardware segment. It also gives subsidy for investments in special economic zones, among other benefits. Apple's products are manufactured in six countries, including Korea, Japan and the US.

Earlier, the finance ministry in May had rejected relaxing the 30 per cent domestic sourcing norms as sought by the iPhone and iPad maker as a pre-condition of bringing in Foreign Direct Investment to set up single-brand retail stores in the country.

India, Portugal sign defence agreement
Source: The Hindu; January 8, 2017

In a bid to boost joint production and development of niche weapons systems, India and Portugal on Saturday entered into a defence agreement — one of the seven sealed during the Delhi visit of Prime Minister of Portugal Antonio Costa.

The agreement came following Portugal’s support to India’s multilateral plans in various technology regimes including Missile Technology Control Regime (MTCR) where India secured membership in 2016. Following the meeting at the Hyderabad House, both the delegations issued a joint statement highlighting convergence of interests.

“Underscoring the substantial opportunities in India’s defence sector and the niche technological competencies of the Portuguese defence industry, Prime Minister Modi invited Portuguese companies to ‘Make in India’ and set up joint ventures and commercial partnerships based on joint production and technology transfer,” the joint statement stated.

Apart from the agreements on defence, visa-free travel for diplomats and marine research, both sides also issued a separate declaration for cooperation in third country. “Such projects should contribute to the local economy, regional connectivity and integration, in order to benefit third countries, by taking into account their priorities in terms of development and the needs of their people,” the declaration for bilateral cooperation in third countries stated.

Earlier, on arriving in India, Mr. Costa announced that his family shared personal ties with India. “It is a great honour for me to be back in India, my father’s country, as the Prime Minister of Portugal,” he said on Twitter.

OnePlus founders on India manufacturing plans, focus areas in 2017 & more
Source: ET Tech; January 9, 2017

OnePlus is currently vetting different partners to expand local production in India, said OnePlus founders Pete Lau and Carl Pei.

On Friday, Lau and Pei unveiled its first ever OnePlus experience store in India located in Bengaluru. This experience store will act as a one-stop destination for OnePlus products apart from being the company's India headquarters and a service center.

In an interview with ETtech's Vikas SN, Lau and Pei talked about India's importance for the Chinese smartphone maker, the recent Flipkart fracas and key focus areas for the year 2017.

What will be OnePlus's key focus areas for 2017?
Pete Lau: We have two focus areas - firstly, a premium flagship product. Secondly, we are now focused on India and Western markets. Improving the speed of software updates is also one of our main focus areas.

We now have a product manager in India as well and are looking forward to finding and addressing India-specific pain points in terms of software.

What are your manufacturing plans for India in 2017?
Pete Lau: We have begun to do local manufacturing for OnePlus 3T in India in smaller batches. We are quite conservative right now because we have to ensure our product quality is not compromised. However, the qualification for local manufacturing to reach our standards is relatively lower than China.

‘IoT, cloud, mobile computing will drive VLSI design industry growth’
Source: The Hindu Business Line; January 9, 2017

As the semiconductor industry heads for a consolidation globally, the VLSI (Very Large-Scale Integration) design sector foresees huge opportunities triggered by demands from the cloud, Internet of Things (IoT) and automotive industries.

The who’s who of the industry from across the globe have gathered here to discuss opportunities and challenges that the sector faces.

Walden C Rhines, Chief Executive Officer of Mentor Graphics, said that cyber security has emerged as a serious issue as hackers have begun to target hardware as well, making life very difficult for industry players. “As hackers penetrate deeper, the impact grows exponentially,” he said.

Delivering the keynote address at the 30th International Conference on VLSI Design and 16th International Conference on Embedded Systems here, he said hackers were injecting viruses and malicious logic inside chips, posing serious threats to the semiconductor industry. Counterfeiting, too, has emerged as a major challenge as it is difficult to tell what is original and what is counterfeit.

Sanjay Jha, Chief Executive Officer of Global Foundries, said that mobile computing, IoT, augmented reality, virtual reality and mixed reality would drive growth in the next few years.

He said the potential for India was very huge with IoT and the cloud promising good growth.

VK Saraswat, Member of the NITI Ayog, highlighted the need to build India’s strategic electronics ecosystem for greater self-reliance and emphasised on its global relevance in the fields of defence, aerospace and internal security.

Japanese Biz Delegation expresses keen interest to invest in sectors including mfg, logistics, power
Source: KNN India; January 10, 2017

The visiting Japanese business delegation has shown keen interest to diversify their business in India in sectors such as Agriculture, Power, Electronics, Railways, Logistics Sectors, manufacturing of ATMs etc while India has requested the Japanese side to take steps to increase Indian Exports to Japan in Sesame seeds, Surimi fish and Indian generic drugs.

Commerce and Industry Minister Nirmala Sitharaman on Monday met the Japanese delegation led by Hiroshige Seko, Minister, Ministry of Economy Trade and Industry (METI), Japan.

She hoped to look forward for a meaningful discussion with the Japanese delegation in the upcoming Vibrant Gujarat Summit.

She stated that the pace of implementation of India- Japan Comprehensive Economic Partnership Agreement (CEPA) has been rather steady and needed to be enhanced with faster pace to tap the huge potential of India- Japan bilateral trade.

The Japanese Minister, while welcoming various steps taken by the Government of India for Make in India and other initiatives for India’s Growth, said that there is a huge potential for Indo- Japanese Cooperation.

According to an official statement, he mentioned that 25 Japanese companies are participating in Vibrant Gujarat Summit with great enthusiasm. The Japanese side requested that the issue of Transfer Pricing assessment and other ones as raised by Japan Chambers of Commerce and Industry in India (JCCII) from time to time need to be resolved for attracting greater Japanese Investments in India.

India needs to guard against technological disruption in manufacturing
Source: The Economic Times; January 10, 2017

The most recent Purchasing Manager's Index (PMI) reflects a contraction in the manufacturing activity in India in December.

Most domestic and international analysts and experts are looking at it from the viewpoint of the move of the government which essentially removed 86 per cent of the currency as legal tender. The unprecedented move does seem to have had an adverse impact on the manufacturing and investment activity. Its benefits, at best, are uncertain at present though the government has been lauding the move from the viewpoint of recovering tax from income tax raids as well as the ability to levy tax on declared income beyond a threshold.

Another positive the government has been vocal about is the change expected in behaviour of people to a less-cash economy. The All India Manufacturers' Organisation has, meanwhile, issued a study which shows a 50 percent dip in revenues and 35 percent job losses for SMEs. The government must carefully look into these figures.

Over the years, if one looks at the performance of the manufacturing sector, it has not been among the best performers. There are a number of reasons for this. A recent report by the Institute for Competitiveness, an international think-tank, looks at some of these aspects as well as compiles an index of manufacturing competitiveness for Indian states.

Government is going aggressive to promote e-vehicles, plans on funding 60% of R&D cost
Source: Business Insider; January 11, 2017

For the first time, the Indian Government is looking forward to fund up to 60% of the research and development (R&D) cost for developing indigenous low-cost electric technology. This move will help power two-, three-wheelers and commercial vehicles operating in public spaces and is aimed at reducing pollution.

Electric mobiles are a foolproof alternatives to reduce pollution and along with it, the government is also looking forward to boost its ‘Make in India’ initiative.

"The intent is to make the hybrid and electric vehicle market in India self-sustaining by increasing domestic capacities for product and technology development. We are inviting proposals in five areas, which will be undertaken as consortia projects involving multiple companies and academic institutions. The government has agreed to provide up to 60% of R&D costs involved in eligible projects,” a senior government representative associated with the Technology Platform for Electric Mobility (TPEM), told ET.

TPEM is a joint initiative of the departments of heavy industry (DHI) and science and technology (DST).

Globally, major auto makers design battery modules in-house for use across their range of green vehicles. With demand for electric vehicles being miniscule in India, it has become necessary to design a common module which can be utilised by several manufacturers to generate scale and make viable economics of manufacturing and selling electric vehicles.

Qualcomm Appoints Larry Paulson as India President
Source: CXO Today; January 11, 2017

Larry Paulson as vice president and president of Qualcomm India. Paulson’s appointment will be effective immediately and he will report directly to Jim Cathey, senior vice president and president of Asia Pacific and India.

Paulson has more than 20 years of experience in strategy, R&D, customer development, product marketing and technology creation. He joined the Company in 2013 as vice president of product management for Qualcomm Reference Design (QRD), a product of the semiconductor business, QCT.

Most recently, Paulson led the QCT Platforms organization and has expanded the Qualcomm Reference Design platform from the low tier to all MSM chipset tiers and into new categories, such as virtual reality. Paulson and his team also established the Qualcomm Global Pass program, which has been launched successfully in Latin America, North America, Europe, India and South East Asia.

Prior to Qualcomm, he was the Chief Marketing Officer and Executive Vice President at Brightpoint where he was responsible for providing direction and coordination in the areas of strategic development, portfolio expansion through new products and services, establishing and managing relationships with key vendors and customers and executing on the global marketing and product plan.

Paulson also served as the President of Technophone Americas and president of Nokia Products Corporation, a USA entity. Technophone was acquired by Nokia in 1991. His responsibilities included product roadmaps, business planning, feature strategies and application activities for all Nokia CDMA products worldwide.

BrahMoS Aerospace not liable to pay sales tax to Maharashtra, says High Court
Source: The Financial Express; January 11, 2017

In a reprieve to BrahMos Aerospace Private Limited, the Bombay High Court today held that the company was not liable to pay sales tax to Maharashtra government for using a unit in Nagpur to store missile parts. BrahMos Aerospace Pvt Ltd is a joint venture between India and Russia that provides BrahMos cruise missiles to the defence ministry.

A division bench headed by Justice S C Dharmadhikari had accepted a petition filed by the company in 2015 challenging the sales tax imposed by the Maharashtra government for storing imported explosive ‘warheads’ at a unit in Nagpur.

BrahMos Aerospace has a manufacturing unit in Hyderabad that has been operational since 2007. As per the plea, BrahMos Aerospace imports missiles from Russia in a ‘Semi-Knocked Condition,’ and assembles them with certain “other elements manufactured or bought in Andhra Pradesh,” and subsequently, sells the missiles to the Indian armed forces. “The combat missiles, which are used in the battle field, are equipped with warheads that are explosive or toxic materials,” reads the plea.

These warheads are imported by BrahMos from Russia, and considering that they are explosive in nature, they are stored at a unit in a village in Nagpur, it added. Accordingly, the combat missiles which are manufactured/assembled by the petitioner at its Hyderabad unit are sent to Nagpur unit for the purpose of integration of warhead and subsequently dispatched to the Indian armed forces from Nagpur.

Manufacturing sector gets a big thrust
Source: The Indian Express; January 12, 2017

Investment intentions worth Rs 17,600 crore slated to generate over 2,000 jobs in Gujarat were inked in engineering, auto and other industries sector on Wednesday at the Vibrant Gujarat Global Summit 2017. Essar Steel Ltd (Hazira Steel Limited) inked an MoU with state industries & mines department to set up a four MTPA steel making facility worth Rs 12,000 crore which will generate job for 2,000 people.

An electronics vehicle and lithium ion batteries manufacturing project worth investment of Rs 5,000 crore set to give employment to 200 people was inked by Aep Endeq Limited with the industries department, while Sun Rise Stainless Steel Pvt Ltd is looking to set up a greenfield project at Mundra and signed an MoU for the same.

A number of cement projects were flagged off at a technical seminar ‘Make in Gujarat- Engineering, Heavy Engineering & Automative – Opportunities in the era of Technological Transformation’.

Among them were the Adani Cementation Ltd and Shree Cement Ltd who signed MoUs with GMDC, while a few companies like Vadraj Cement Ltd, Ultratech Cement Ltd, RSPL Ltd and Gulf Mining Material Co and Aastha Infra Lived Private Ltd who inked token agreements (MoUs) with the state Commissioner of Geology & Mining.

Pravasi Haryana Diwas: Government to set up 18 clusters for electronics manufacturing
Source: Firstpost; January 12, 2017

Union Minister of Electronics and Information Technology Ravi Shankar Prasad said here on Wednesday that with its focus on electronics manufacturing, the central government has planned to set up electronics clusters in 400 towns and cities.

He said that India’s electronics manufacturing market would be $400 billion by 2020.

Prasad was speaking at a session on ‘IT-ITeS and ESDM: The next era of State’s Growth and Innovation’ at Pravasi Haryana Diwas-2017, in Gurugram.

He lauded the initiative taken by Chief Minister Manohar Lal Khattar and his government to promote IT services in the state.

Prasad said that when he took over the Ministry of Electronics and Information Technology, Indian exports were worth Rs 11,000 crore which have gone up to Rs 1,26,000 crore as of December 2016.

He said that Indians have a passion for technology and therefore the digital eco-system in the country would change in the future, adding that digital payment is going to create a new digital infrastructure in India.

Prasad said that a minimum of 10 million Point of Sale (POS) machines and industrial machines were needed apart from mobile wallets.

He said that Haryana has a lot of potential and possibilities for innovations in the fields of digital payment, internet, artificial intelligence, digital education and cyber security. These are a great platform for small and mid-level enterprises to grow.

Defence sector waits for capex to pick up in budget 2017
Source: Mint; January 12, 2017

The only trouble with the defence business, lamented a chief financial officer of a company that built a new facility to supply components, is paucity of orders. As the anticipated orders did not materialize in the stipulated time the company was unable to scale up defence business as projected, resulting in earnings estimates cuts last year.

The orders did eventually materialize. But they are not yet large enough to be commensurate with the new facilities built up. This, in short, captures the situation of the companies that depend on the defence sector for their business.

There are a few listed companies (Bharat Electronics Ltd) that are completely dependent on the defence sector for business. But as the government stepped up its indigenization plans, several companies, including L&T Ltd, Tata Power Co. Ltd, Ashok Leyland Ltd and Bharat Forge Ltd, began pursuing the defence business with new vigour. Companies like BEML Ltd, Solar Industries India Ltd and Premier Explosives Ltd are seeing the defence business as a growth avenue.

The benefits, however, have been slow to come. Bharat Electronics’ revenues grew just 6% in 2015-16. In the first half of the current fiscal year, they are up a mere 1.6%, as execution lagged. The company has a huge order backlog. For others, time consuming procedural delays and approvals mean orders are lumpy or slow in materializing.

India, US Sign Agreement on Cyber-Security Cooperation
Source: NDTV; January 12, 2017

India and the US have signed a memorandum of understanding (MoU) on cooperation in the field of cyber-security, an official statement said in New Delhi on Wednesday.

"India and the US have signed a memorandum of understanding between the Indian Computer Emergency Response Team (CERT- In) under the Ministry of Electronics and Information technology of the government of India and the Department of Homeland Security, government of the United States of America on cooperation in the field of cyber-security," the statement said.

The agreement was signed by Aruna Sundararajan, secretary, Ministry of Electronics and Information Technology, and Richard Verma, US Ambassador to India, on Wednesday in New Delhi.

"The MoU intends to promote closer co-operation and the exchange of information pertaining to the cyber security in accordance with the relevant laws, rules and regulations of each economy and this MoU and on the basis of equality, reciprocity and mutual benefit," the statement said.

Earlier the US and India had signed an MoU on July 19, 2011 to promote closer cooperation and timely exchange of information between the organisations of their respective governments responsible for cyber-security.

Since, July 19, 2011, regular interactions between CERT-In and US CERT are taking place to share the information and discuss cyber-security related issues.

In continuation to the cooperation in cyber-security areas both have renewed the MoU, the statement added.

Compiled by IESA Research

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