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12th Anniversary

Assocham, Videocon gear up for GST, launch awareness drive for consumer electronic traders
Source: India Blooms; June 3, 2017

The daylong Assocham Videocon GST Summit for traders witnessed deep discussions around GST, addressing retailers’ queries, and offering them a clearer understanding of the GST concept.

The seminar was inaugurated by the Chief Guest Arjun Ram Meghwal, Minister of State for Finance, Ministry of Finance. The Seminar was also addressed by R. N Dhoot, Member of Parliament.

Being the most pro-active Chamber of Commerce, Assocham has taken a step towards imparting knowledge on immediate as well as far reaching impact of GST on the businesses through the Assocham Videocon GST Summit.

Emerging as the fountainhead of Knowledge for Indian industry, ASssocham has always worked towards creating a conducive environment for India business to compete globally.

In its next meeting on June 3, the goods and services tax (GST) Council will fix rates for certain items that could not be decided upon at its meeting in Srinagar, Union Minister of State for Finance, Mr Arjun Ram Meghwal.

“We have also received representations from some sectors including textile for which the rates had been fixed, we will discuss it in the next GST Council meeting,” said Mr Meghwal.

“In textile sector, garment manufacturers and cloth manufacturers want different rates, we will discuss these issues on June 3,” he said.

Govt considering to further relax FDI in defence in boost for manufacturing
Source: Firstpost; June 5, 2017

The government is considering to further relax foreign direct investment norms in the defence sector with a view to attract more overseas inflows.

The issue was discussed in a meeting convened by the department of defence production.

"The meeting was attended by industry chambers including CII and FICCI. The ministry asked the stakeholders to suggest what more needs to be done in the FDI policy to attract foreign investors," sources said.

Currently FDI up to 49 percent is permitted in the sector through automatic route and beyond that up to 100 percent via government nod is permitted.

Industry experts have stated that foreign investors seek assured orders before setting up manufacturing unit in any country.

In India, government is the only procurer of defence equipment. Besides, export of defence products from India is also very regulated.

In 2016, the government relaxed FDI norms in several sectors including defence. India imports 70 percent of its military hardware from different countries.

As per the policy, foreign investment up to 49 percent has been permitted in the defence sector through automatic route, and beyond that limit through government route on case to case basis, wherever it is likely to result in access to modern and state-of-art technology.

Last month government cleared 'strategic partnership' policy to create a vibrant defence manufacturing ecosystem in the country through involvement of both the major Indian corporates as well as the MSME sector.

Andhra govt to partner with private firms to develop plug-and-play infra
Source: Business Standard; June 5, 2017

The Andhra Pradesh government has come out with a separate policy for global in-house centres (GICs) with an objective to attract potential job creators by offering plug-and-play infrastructure developed in collaboration with private sector.

The concept of GICs, an alternative model to the third party vendors, has been gaining ground with global companies setting up their own subsidiaries to handle the business process management (BPM) work, which is otherwise being outsourced to off-shore firms.

The GIC model has been adopted across a wide range of industry verticals including manufacturing, healthcare, engineering services and research and development (R&D) services, among others. State has set a target of generating 50,000 jobs, besides facilitating capital investment of Rs 2,500 crore through GIC-related activities under the proposed policy.

Overall, there were around 1,050 GICs operating in India until 2016. Of this, 35 per cent were located in Bengaluru alone, followed by Mumbai and Pune at 24 percent and the Delhi National Capital Region at 14 percent. Around 21 per cent of GICs were located in Hyderabad and Chennai, according to the information technology (IT) department.

Andhra Pradesh had to start afresh in creating ecosystems for IT, software and BPO companies as the size of operations of companies located outside the Hyderabad city was very small prior to the state's bifurcation.

Central aid for electronic park in Kakkanad
Central aid for electronic park in Kakkanad

Central aid for electronic park in Kakkanad

In a move that could boost Kerala’s IT sector, the Centre has given its financial and technical support to set up an electronic manufacturing park and an IT incubation centre for startups here.

The Central Government has agreed to provide Rs 50 crore for the electronic park, which will be located in Kakkanad, Ravi Shankar Prasad, the Union Minister for Electronics & IT and Law & Justice, told reporters here on Sunday. The state government will provide the remaining amount, the Union Minister said.

The Union Government is also providing assistance to the state government for setting up a 30,000 sq ft incubation centre for the startups in the IT sector, which is also located in Kakkanad, Ravi Shankar Prasad said.

A scheme to provide BPO jobs in smaller towns will help Kerala to provide 1,500 jobs in smaller towns, explaining the Modi government’s achievements in the last three years, he said. The number of seats or jobs in the scheme is based on the population of a state.

“In the last three years, Rs 5,900 crore worth FDI has come to India in the IT sector. When Modi government assumed power it was just over Rs 1,000 crore. The share of Kerala in IT sector FDI is very negligible. I urge the Kerala government to leverage this great opportunity,” the Union Minister said, adding that the state was also not utilising its potential in IT exports.

Ministry working on tie-ups with defence manufacturers: Bhamre
Source: The Hindu Business Line; June 5, 2017

The Defence Ministry is working on a concept of strategic partnerships with original equipment manufacturers to give a boost to indigenisation of defence-related production, Union Minister of State for Defence Subhash Bhamre said today.He said the government wants world-class manufacturers to come to India and establish units in association with local partners.

“We are working on a concept of strategic partnerships with the original equipment manufacturer (OEM) which will be a foreign company. We have identified four segments for it, including combat aircraft, tanks, submarines and helicopters,” Bhamre told reporters in Goa.

India looks at foreign defence manufacturers to transfer their technology, work with Indian scientists, people, train them so that in the next few years “our people will start manufacturing in the same segment,” he said.“This was an idea which has been worked on for the last few months. The idea was initiated by then Defence Minister Manohar Parrikar.

In the months to come, we will be able to finalise strategic partnerships under this programme,” he said. On the increasing role of private partners in defence manufacturing, Bhamre recalled how armed forces were dependent on Ordinance Factory Board (OFB) and defence public sector units which were functioning under a protective environment. The minister said they were lagging in research and development (R&D).

Samsung to invest Rs 5,000 crore to expand Noida plant
Source: The Economic Times; June 6, 2017

Samsung Electronics is investing about Rs 5,000 crore to more than double mobile phone production capacity in Uttar Pradesh by 2020, making it the South Korean company’s biggest investment in India, where it’s holding on to a lead against increasing threats from Chinese rivals. The total includes nearly Rs 2,000 crore the company had pledged last year. The No 1 smartphone maker in the world and India intends to make the South Asian nation a manufacturing and export hub, with shipments to Europe, Middle East, Africa and elsewhere expected to kick off in 2020, a senior government official told ET.

“This will be the biggest investment Samsung is making in India,” another official said.

“They (the company) have taken another site close to the existing one (in Noida), doubling the area from 130,000 square metres,” the official said

Samsung, which already manufactures all of its phones that it sells in India, declined to comment. Local production means better pricing and control over the supply chain, besides quicker time to market — all critical for success in as intensely competitive a market as India. Samsung and Apple are vying with Chinese rivals such as Xiaomi, Oppo, Vivo and Lenovo, besides homebred players such as Micromax, for a greater share of the Indian market.

Siemens, TCS tie-up for industrial IoT services
Source: The Economic Times; June 6, 2017

Tata Consultancy Services (TCS) and electronics company Siemens on Tuesday announced a collaboration around Internet of Things (IoT) innovation that will enable customers to benefit from data insights and services based on "MindSphere," a cloud-based, open IoT operating system from Siemens.

Customers in the manufacturing, energy, technology, healthcare and railway industries will benefit from new applications that will enable them access to new digital and analytical services such as predictive maintenance and energy monitoring.

"We have been collaborating with Siemens on technology innovation for several years and this latest development will enable our customers to make major strides in IoT innovation," Milind Lakkad, Executive Vice President and Global Head of Manufacturing at Tata Consultancy Services, said in a statement.

"Our clients will not only benefit from expertise in application development and systems integration but also from the first-hand experience of the platform development," he added.

Initially, the programme will be focused in the manufacturing sector where IoT has already gained significant traction due to the immense data volumes generated in the production process.

"Siemens, together with TCS, will help customers evaluate and utilise data to achieve new insights which could ultimately pave the way for completely new business models," added Steve Bashada, Executive Vice President and General Manager of MindSphere at Siemens

Modi seeks job pledge from Apple in lieu of tax concessions for manufacturing iPhones in India
Source: The Financial Express; June 6, 2017

India wants Apple Inc. to commit to investment and creation of jobs before it will consider the company’s plea for tax concessions for manufacturing iPhones in the South Asian nation, people with knowledge of the matter said. Prime Minister Narendra Modi’s government has asked the U.S. company to lay out details of the money it plans to pump into the country and the potential number of jobs the investment will create, the people said asking not to be identified as the talks are private. The move comes amid concerns that growth in Asia’s third-largest economy isn’t helping add jobs.

The Cupertino, California-based manufacturer of iPads and iPhones already started initial production of 4-inch iPhone SEs last month at a Wistron Corp. plant in the southern city of Bengaluru in Karnataka. Electronics and IT secretary Aruna Sundararajan had said on May 23 that the company was in talks with the government on its expansion plan in the world’s fastest-growing major smartphone market.

T he Modi government has been urging foreign investors to make products in the country as part of its ‘Make in India’ policy, which aims to increase the share of domestic manufacturing in the $2 trillion economy and create jobs.

Last year, the company had sought a slew of incentives, including lower duties for importing components and equipment for a period of 15 years. However, the finance ministry turned down the company’s demands.

India will become a $1 trillion digital economy in next 5-7 years: Ravi Shankar Prasad
Source: ET Telecom; June 7, 2017

With initiatives like Make in India, Skill in India, Start-up India and Smart Cities, the government is aiming at a $1 trillion digital economy in the coming 5-7 years which includes communication, IT and IT enabled services, electronic manufacturing, e-commerce, digital payments and cyber security.

“The number is achievable because the communication industry's worth is $150 billion, IT and IT enabled services stand up to $50 billion, both totaling to $300 billion. Electronic manufacturing in India is worth $100 billion, e-commerce is $35 billion and even without including digital payments, the entire ecosystem has a worth of more than $400 billion at present,” said Ravi Shankar Prasad, Minister of IT and Electronics at an event on Wednesday.

“India's digital payment itself is going to become $500 billion economy by 2020. Therefore, $1 trillion in the coming 5 years is easily achievable which is the larger picture we are aiming it,” added Prasad.

Mobile manufacturing in India increased to Rs 54000 crore in 2015-2016 and is likely to exceed Rs 90000 crore by the end of this year, according to official data.

"When our government had come, we had investment of only Rs 11000 crore in the electronic sector which is now at Rs 153000 crore," told the IT Minister.

GST impact: Here’s a look at how it affects electronics, services and automobile’
Source: BGR India; June 7, 2017

Soon after the Goods and Services Tax (GST) was approved in the Lok Sabha, the GST Council has now cleared framework rules to shed more light on finer details related to the rates that will be applicable on different goods and services. For those wondering what is this GST all about, it is essentially a proposed system of merging most of the existing taxes into a single taxation system. The new centralized tax system (GST) will replace a number of indirect taxes that are currently applicable, thus also easing the overall taxation process.

GST will be rolled out from July 1 2017, and ahead of that, the government has categorized a total of 1,211 items, placed under different tax slabs. Yes, GST was expected to bring one single tax system, but turns out, there will be a total of five slabs – zero percent, five percent, 12 percent, 18 percent and 28 percent.

We spoke to CounterPoint Research analyst Neil Shah to understand the new taxation, and how it will affect the prices. So, if you are wondering which electronics products are getting cheaper and what all products are getting dearer, we have compiled a list to make things easier for you.

With all the indirect taxes, a tax of around 13.5 percent is currently levied on smartphones, but with GST, it will come down to 12 percent. This will make smartphones a bit cheaper than they are right now. Don’t expect a drastic fall, but some marginal fall will be there. The components used for making smartphones are also categorized in the 12 percent price bracket.

Xiaomi open to more manufacturing in India
Source: Business Standard; June 8, 2017

Chinese electronics major Xiaomi on Wednesday said it was open to expanding manufacturing facilities for mobiles and other devices in India.

“We are open to setting up production facilities, not only for phones, but also for other devices,” said Manu Jain, vice-president, Xiaomi, and managing director, Xiaomi India.

At present, the company’s devices are produced in India at two manufacturing facilities of contract manufacturer Foxconn in Sri City, Andhra Pradesh. While one is a dedicated unit, the other manufactures phones of other brands as well.

About 95 per cent of the phones Xiaomi sells in India are manufactured in the country. It is ramping up manufacturing to deal with supply shortage.

“Once we meet a certain volume threshold, we would be open to setting up more plants,” said Jain, adding that at present products such as power banks and Mi Bands, a fitness bands the company makes, are imported from China. He claimed his company’s products were already leading the market.

“We have significantly ramped up our supply. Three years back we were selling 10,000 phones a week. Now, it is 300,000 units a week,” he said. On growth, he said the company has been doubling its efforts in the recent past. Last year, Xiaomi had 225 service centres; by July this year, it would have 500. The number of it call centres had increased from one to two this year.

LG India eyes 50% market share with new OLED TV range
Source: Hindu Business Line; June 8, 2017

LG Electronics India is betting big on the super premium TV segment this year. The South Korean consumer electronics major on Wednesday launched its new OLED TV range with nine models priced in the range of about ?3.25-30 lakh.

Rishi Tandon, Business Head-FPD, LG Electronics India, said: “The super premium TV segment has grown by about 100 per cent over last year. The segment, which was just about 3,500 units earlier, grew to about 7,000 units last year. We believe this will grow to about 20,000 units this year and with our range of unique products, we aim to have 50 per cent share in this segment.”

Tandon said the company’s aggressive focus on this segment was also strategic in nature, as it hoped to strengthen its positioning in the premium category across all products.

The company is also launching 52 new models to enhance its position in the overall flat panel TV segment. Tandon said consumers in India were fast transitioning to smart-TVs and the segment was witnessing a growth rate of 60 per cent.

At present, the overall flat panel TV market is pegged at about 10 million units, including non-smart TVs, smart TVs and the 4K TVs. LG India had earlier said it would soon launch a range of premium products under a new ‘Signature’ brand. The company has kick-started these plans with the launch of its top-of-the-line LG Signature OLED TV models.

India among top five consumer markets in Asia: BMI Research
Source:; June 8, 2017

India is among the top five consumer markets in Asia offering retailers consumer spending growth of an average of 6.1 per cent over the next five years, says a report.

According to BMI Research, a Fitch group company, China, Sri Lanka, Vietnam, India and Indonesia represent five favourite consumer markets in Asia, offering retailers the strongest consumer spending growth over its forecast period to 2021.

"Consumer spending in India will maintain strong levels of growth through to 2021, as the country's positive economic outlook continues," BMI Research said adding real consumer spending growth is expected to see an average of 6.1 per cent over this five-year period, with 2017 coming in at 6.2 per cent.

Some of the key factors responsible for increase in consumer spending include, increasing access to consumer credit, lower inflation, and a more favourable regulatory environment for foreign-owned retailers bodes well for India's consumer sectors over the coming years.

The report further said India has a thriving e-commerce segment, with online retail sales expected to continue growing at double-digit rates over our forecast period.

"Due to limitations on the activity that overseas retailers are allowed to undertake, e-commerce has so far been dominated by local firms such as Flipkart and Snapdeal.

"However, Amazon is making a real push into the market and recently announced USD 500 mn investment to roll-out online food retailing in India.

Chinese smartphone maker iVOOMi to invest Rs 250 cr in India
Source: Business Standard; June 8, 2017

Chinese electronics firm iVOOMi on Thursday announced to invest Rs 250 crore to further strengthen its entry-level smartphones segment in the country.

The investment will be done in two phases. In the first phase, the company will invest in futuristic technologies to bring advanced products at an affordable price and will focus on setting up its manufacturing facility in India.

In its second phase of investment which will be in 2018-2019, the brand will focus on setting up R&D capacities and will also expand the manufacturing capacity within the country.

"With the significantly rising penetration of the iVOOMi smartphones, our mission is to establish iVOOMi as the most preferred smartphones brand in the entry-level segment," said Ashwin Bhandari, Chief Executive Officer, in a statement.

The company is working closely with technology giants like Qualcomm, MediaTek, Spreadtrum, Intel, Samsung, Galaxycore, OmniVision, Asahi, DragonTail and BnK to develop future-ready products for users across tier II, III and IV towns in the country.

It also plans to launch an extensive portfolio of smartphones in India with world-class features by the next quarter.

Apart from smartphones, the company also aims to introduce smart devices, smart accessories and personal care electronics this year.

State govt getting huge response for IT parks: West Bengal FM
Source: The Indian Express; June 9, 2017

West Bengal finance minister Amit Mitra on Thursday said the state government was getting huge response from information technology (IT) firms in terms of occupying spaces in newly developed IT parks across the state. Speaking at the inaugural session of the 15th edition of ‘Technology Senate — The Indian IT Leadership Conclave’, organised by The Express Group here, Mitra said: “Earlier, we had eight IT parks. Twelve new IT parks have been set up. They are getting huge response from the private sector, and some of them are already filled up. All the new IT parks in West Bengal are ready now. Except one in Rajarhat, all of them have been set up outside Kolkata.”

The minister said that the IT parks have been developed mostly in smaller cities, to allow for the creation of more employment opportunities. On the investment the new IT parks could attract, Mitra said: “Investment is not a big deal here, because in IT industry, it is not very big. Square footage (total space occupied by firms) and the number of people employed in the parks are more important. In IT parks at Siliguri, around 700 people are already working. Purulia’s new IT park is getting very good response from IT companies. They must be doing BPO (business procedure outsourcing) there by employing local boys and girls.”

Compiled by IESA Research

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