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  IESA WINWire Mar 18, 2017 - Mar 24, 2017 for Subscription click here  
11th Anniversary

Maker Village hosts Hardware Startup Contest
Source: The Times of India; March 18, 2017

Electronics incubator Maker Village here will host the India finals of the AlphaLabGear Hardware Cup on March 27.Promising early-stage hardware startups stand to win exciting prizes, a chance to get an acceleration program in the US as well as compete for a USD 50,000 grand prize, at the competition that is being conducted in India for the first time, a press release said here today. The AlphaLabGear National Hardware Cup is an annual pitching contest conducted in seven cities in the US to identify and nurture talented early-stage startups that have created at least one physical product. The fact that India has been chosen to host the first such competition outside the US is a sign of the growing global interest in the country as a source of hardware innovation, especially given the government's current thrust on boosting ESDM (Electronic Software Design and Manufacturing) as well as flagship programmes such as Make in India and Digital India, said Maker Village Chief Consultant Prof S Rajeev.

Kerala StartUp Mission CEO Jayasankar Prasad said the support from Kerala government to IT sector over the past years has transformed the state into an emerging technology innovation hub. Prestigious startup support programmes like the AlphaLabGear Hardware Cup coming to Kerala signal the maturing ESDM environment in the state, he said. Maker Village, a project funded by the Union Ministry of Electronics and IT and state has facilities in Kochi and Thiruvananthapuram to incubate and supports startup companies in electronics.

IESA floats electronics centre’s DPR
Source: The Times Of India; March 19, 2017

The India Electronics and Semiconductor Association (IESA) has submitted a detailed project report (DPR) for the proposed Electronics Manufacturing Cluster (EMC) in Pune in association with the Mahratta Chamber of Commerce Industries and Agriculture (MCCIA).

The cluster would be spread across 27,000 sqft and hold 20-30 employees. "The proposed activities comprise designing centre, environment lab, test and measurement lab, rapid prototyping and tool room, among others. The preliminary application and DPR was already approved by the ministry of electronics and information technology (MeitY). The final DPR with total estimated project cost of Rs66.15 crore is under appraisal. IESA is working closely with the government and industry for the same," said sources in IESA.

The trade body has also conceptualized an electronics incubation centre in Pune, with a project cost of Rs56.94 crore.

A Silicon Valley In Every State Through 'Make In India' Revolution
Source: Business World; March 19, 2017

Startups drive the sustainable economic growth and generate large scale employment opportunities for a country. Startups are driven by technology and innovation and prove to be the most effective instrument for a countries transformation. Indian startup structure has created millions of jobs in the country and gets full support from the government.

In order to provide funding support to startups, government has set up funds with initial corpus of 2500 crore and total corpus of 10,000 crore over a period of 4 years, providing 2500 crore of investments per year. The fund will be in the nature of funds of funds, which means it will not directly invest into startups, but shall participate in the capital of SEI registered venture funds. Life Corporation of India is co-investing in the funds of funds initiative.

The government has decided that there should be no financial barrier coming in way of any great ideas and as a result the profits of startups initiatives are exempted from income tax. The tax on startups has been exempted for 3 years.

The introduction of 'Startup India', by the Department of Industrial Policy and Promotion aims at promoting startup in every sector of the society. The campaign wants to promote entrepreneurship among SCs/STs and the women community of the country. Prime Minister Modi's vision for 'Startup India' is to create startups in every corner of the country.

Govt considers reality show for startups, looks at Shark Tank
Source: The Indian Express; March 19, 2017

The Department of Industrial Policy and Promotion (DIPP) has given in-principle approval for a government-run reality show on the lines of the popular American TV programme Shark Tank, to promote startup culture in the country. The programme, to be simultaneously broadcast on Doordarshan, a private general entertainment channel, radio and digital platforms, would have startups pitch to a panel of investors for on-the-spot investments.

As per the proposal, there would be one round of “screening” and two rounds of “evaluation” for the startups to feature on the show. While the DIPP is reportedly facing problems arranging the finances, its secretary Ramesh Abhishek is learnt to have accorded his in-principle approval on March 4.

During preliminary discussions, NASSCOM told the government the show would require a budget of Rs 64 crore. While Rs 34 crore may be raised from states and sponsors, the DIPP would have to shell out at least Rs 30 crore from its own pocket.

The applications would first be sourced through online and offline outreach, targeting young professionals and startup founders. “A filtering process shall be applied… The focus of the outreach programme would be to encourage entries from all states of the country. At the screening at the application stage, 2,000 (out of 10,000 applications expected) will be shortlisted,” says the DIPP note detailing the programme.

Move afoot to ease norms for VC funding in startups
Source: The Economic Times; March 20, 2017

The Department of Industrial Policy and Promotion has moved a cabinet note that seeks to ease venture capital funding norms for startups and relax the definition of a startup to include older biotechnology and medical device companies.

The DIPP has suggested these changes be incorporated under Startup India Action Plan, the Narendra Modi-led government’s flagship initiative for nurturing innovation. A senior government official told ET that VC funds will be more willing to finance newer ventures if they are able to spread their risks. The DIPP has proposed that VC firms where government holds a stake be allowed to invest a part of their corpus in firms other than startups, the official said.

“This has been one of the reasons why VC funds have not reached out to startups as we expected. They have to be allowed to hedge their risks,” the official said. Last year, the government had approved a Rs 10,000-crore ‘fund of funds’ for startups, which requires VC firms to limit their exposure only to startups.

But officials said a little diversification will allow these funds to balance the risks of funding new ideas. The fund of funds was set up to support innovation-driven star . Managed by SIDBI, it seeks to invest in other funds that will, in turn, invest in innovative ideas. The entire corpus will be released in two cycles by 2025. So far,Rs 129 crore has been sanctioned by SIDBI to various VC funds.

Focus On Defence Manufacturing Paying High Dividends
Source: Business World; March 20, 2017

Defence is one of the most important sectors in India strategically. We have a military strength of over a million and import more than 70% of our military armaments. The government of India has allowed 100% FDI out of which 49% is through automatic route; which allows for FDI without government approval.

There were a lot of questions regarding the national security for 100% FDI but the government has backed itself saying it does not compromise national security but brings greater investment and more employment.

India's focus on defence manufacturing is paying off high dividends as it unveiled HAL manufactured Tejas light combat Aircraft and Thermobaric ammunition for Arjun tanks. While India signed a 58,000 crore deals with Russia for 36 Rafale fighters, the manufacturer was ready to manufacture the planes in India if ordered a bigger consignment. Brahmos missile, a joint venture between Russia's NPO and India's DRDO, has been in talks of exporting it to the Latin America and South East Asia.

India's defence exports almost doubled during the financial year 2015-2016 and manufactured equipments worth Rs 2,059 crore were exported to 28 countries. Foreign companies manufacturing goods in India have to pass the technology to Indian companies for their native production. Foreign companies need not mention their tie up with Indian counterparts at the time of bidding and 51% Indian equity ownership has been removed.

Indian private companies like Reliance Defence Anil Ambani Group(RDEC), Reliance Industries, Larsen& Toubro and Mahindra have stepped up to manufacture defence armaments.

BOE Technology enters Indian consumer electronics market
Source: The Economic Times; March 21, 2017

Chinese display panel maker BOE Technology has forayed into the Indian market as the company expects good opportunity in the consumer electronics segment here.

The Beijing-headquartered firm has aggressive expansion plans for both business-to-business and business-to-consumer category, following rapid growth of TVs, mobile phones and Internet of Things (IoT) markets.

"India's TV and mobile consumer markets are growing at a rapid pace and, coupled with IoT (that) offers tremendous opportunity for BOE Technology Group," said BOE Chief Strategy Marketing Officer Leono Guo.

He further added: "Through our Indian subsidiary, BOE India, we are offering technological innovation and development through exciting products and services to Indian consumers. We are also establishing a people-oriented healthcare service and Big Data system, making healthcare services smarter and efficient".

BOE India is promoting display, intelligent systems, health services and products in the Indian market.

However, on being asked that whether BOE has any plans to a manufacturing unit here in India, Guo said the company has no such plans.

The company has last year set up a subsidiary here for sales and marketing research, Guo added.

"We want to introduce our commercial display product to the local market," he added.

BOE's products are used in applications including mobile phones, tablets, notebooks, monitors, TVs, vehicle displays, digital information displays, healthcare, finance, and wearable devices.

Smart factories are the new reality of manufacturing
Source: DNA India; March 21, 2017

Underpinned by a robust manufacturing sector, India ranks ahead of global GDP average and growth forecasts. In the coming decade, India’s manufacturing may touch USD 1 trillion and generate 90 million jobs. However, to make Indian manufacturing globally competitive, it’s critical for the sector to be digitally transformed and be future-ready to cope with the fast changing business and technology landscape.USD 1 trillion and generate 90 million jobs. However, to make Indian manufacturing globally competitive, it’s critical for the sector to be digitally transformed and be future-ready to cope with the fast changing business and technology landscape.

Globally, smart factories are taking centre stage for new-age manufacturing. While traditional 'automation' still requires human input; in comparison, ‘smart factories’ are reducing operating costs by digitizing production across global markets. Not only do smart factories reduce the cost of labor but also the potential for error, with end-to-end automation across the value-chain. Smart factories entail a grid of interconnected machines that can manage logistics, manufacturing, distribution, retail and even after-sales.

With the advent of machine learning, a human's role primarily becomes one of complex decision-making and intervening whenever required. Real-time data flowing among intelligent Computerized Numerical Control machines acts as the lifeblood of smart factories, and translates into actionable insights on infrastructure, inventory and workflow. Analytics alerts manufacturers about possible issues regarding their business health, and also of customizations to make their products more attractive. Further, machines can even evaluate themselves for deterioration.

Revenue Department rejects tax exemptions sought by Apple: Report
Source: The Financial Express; March 21, 2017

The Revenue Department on Tuesday rejected tax exemptions sought by Apple, government sources told ET Now. “Apple’s demand with regard to GST rejected since it hasn’t been implemented yet. The Finance Ministry has refused to grant tax exemptions to any one single tech company and will be granting tax benefits for the tech sector as a whole,” the sources added.

According to a recent FE Bureau report Ministry of electronics and IT secretary, Aruna Sundarajan said a decision on incentives to Apple can be taken only after tax rates under GST are finalized. “GST is still evolving. See, what they (Apple) are asking for is, make it profitable for us to manufacture here and therefore give us a favorable duty regime. Exactly how favorable it should be is something that needs to be ironed out. But the first thing is what will be the manner in which this would be reflected in the new GST regime, (firmed up by) the GST Council,” Sundarajan said.

Sundarajan added: “So only once the council decides how the existing trade regime is going to get translated into the new one and how domestic manufacturing incentives are going to get reflected in GST can a decision on Apple’s demands can be taken.” On Apple’s demands regarding making refurbished iPhones in India, the secretary said: “As long as they are exporting (it could be allowed)… They have asked for exports.”

Start-ups in the docks over marked down valuation tax as March 31 nears
Source: The Economic Times; March 22, 2017

As the March end nears, many start-ups may face a difficult choice, whether to go ahead and pay the tax demanded due to falling valuations or challenge the government over such a demand.

Many start-ups that have seen marked down valuations in subsequent funding rounds have been ordered to pay tax on the grounds that the first round of investment was made at a premium.

Start-ups that have received the tax demand will have to cough up 33% tax on the premium by March 31 or challenge the order in the court of law. The tax demand is made for the assessment year 2013-14 and 2014-15 in almost all the cases.

There was a hope that the government may roll out a leeway and relax the rule that is causing the problems for many start-ups. “Any consideration received by a company (start-up) from a resident against the issue of shares exceeds the fair market value of such shares, such excess consideration is taxable in the hands of the start-up as income” reads the Section 56(2)(viib) of the Income-tax Act, 1961.

ET had on June 2 written that startups with marked down valuations may face tax notices. After which Central Board of Direct Taxes (CBDT) on June 14 had issued a notification and said that no such tax will be levied on startups that register with the government. In one of the cases, a tax demand was made on a start-up that had got three rounds of investments. In the first round, a group of angel investors invested in the start-up at 10 times its valuation. But the second round of investment from a venture capital fund was made at six times the valuation of the start-up.

IoT, Smart Tech policy soon
Source: The Hindu; March 22, 2017

Telangana Government will unveil in a few weeks a policy on Internet of Things and Smart Technologies detailing the support measures and incentives to be offered for companies setting up facilities in these areas.

The draft was reviewed a couple of days ago and the policy is ready to be launched, IT and Industries Secretary Jayesh Ranjan announced on Wednesday.At the inaugural ceremony of ORBCOMM’s centre of excellence for software application development and Tier-I customer care in the city.

Urging the US firm to consider setting up a manufacturing unit in the State, he said that under the policy IoT firms setting up manufacturing facilities would get incentives similar to those being made available under the Electronics Manufacturing Policy.

A Machine to Machine and IoT solutions provider, ORBCOMM has a commercial satellite network dedicated to M2M solutions.

Pointing out that Hyderabad was well-positioned, given its infrastructure and talent pool, to emerge as a hub for the company to cater to the market in India and several parts of Asia, Mr. Ranjan said that IoT companies integrating software and hardware would also get incentives. Also, in the event of IoT or smart technology products being of relevance to the Government “we will be happy to be your first customer,” the official said.

Exclusive: Plan To Build Choppers For Indian Forces Remains Grounded As Russia Drags Its Feet
Source: Huffington Post; March 22, 2017

The first major hurdle to "Make in India" in defence manufacturing appears to be coming from an old friend, that is, Russia.

In October 2016, India and Russia agreed to jointly manufacture Kamov-226T multi-utility helicopters in India for the three services. The agreement was presided over by Prime Minister Narendra Modi and President of the Russian Federation Valdimir Putin. It was the first major defence venture under the Modi government's "Make in India" programme. But there has been no progress since.

The Kamov-226T is a twin-engine helicopter known for ruggedness and performance. Faced with the need to replace the ageing Cheetah and Chetak helicopters, India planned to manufacture as many as 200 helicopters.

Top defence ministry sources told Huffington Post, India, that the two countries haven't yet decided on the exact price of the helicopters. The price being quoted by Russia is much beyond New Delhi's expectation.

More importantly, Russia isn't very comfortable sharing technology with the Indian private sector. The agreement specified that Hindustan Aeronautical Limited (HAL)— the Indian defence public sector unit — would get Indian private sector entities as partners to manufacture various components for the Kamov-226T helicopter. Not happy with this involvement of the India private sector, Moscow has held back "critical clearances".

Hyperloop Transportation Technologies begins capsule construction for delivery in early 2018
Source: Money Control; March 22, 2017

Hyperloop Transportation Technologies (HTT) has begun construction of the world’s first full scale Passenger Hyperloop Capsule. This first capsule is the culmination of over three years and thousands of hours of design, research, and analysis.

Construction is underway for delivery and an official reveal in early 2018 at HTT’s research and development center in Toulouse, France for integration and optimization. The capsule will then be utilized in a commercial system soon to be announced from the ongoing negotiations and feasibility studies currently taking place around the world.

HTT’s passenger capsule is being built in collaboration with Carbures S.A., a leading expert in fuselage and advanced materials construction in both aeronautics and aerospace.

“We are building the world’s first full scale passenger hyperloop capsule,” HTT CEO Dirk Ahlborn said.

“We are taking a passenger first approach to guarantee that safety is always our number one concern. It has been crucial in our development to go past the simple requirements of freight in order to build a better and safer system for everyone.”

“This is a fascinating project utilizing our expertise and technology around the world,” said Carbures Co-founder and Chairman Rafael Contreras. “We are pleased to work in this innovative, global, and important project.”

Industry associations call for Stayzilla CEO's release, guidelines for startup closures
Source: The Economic Times; March 22, 2017

With Stayzilla founder Yogendra Vasupal failing to get a bail after over a week in jail in Chennai, several industry associations have come together to appeal for his release and to highlight the negative repercussions of this case. Several entrepreneurs and investors who have formed a group post Vasupal's arrest have also been warning of the impact on the startup culture in the country.

Industry associations such as FICCI, NASSCOM, iSPIRT, CII, IAMAI and TIE issued a press note on Wednesday, and aside from asking for Vasupal's release, they also called for a right legal framework for business closures.

"Yogendra continues to be in jail in Chennai for over a week with no sight of his bail applications coming up for hearing. This is very unfortunate and we strongly urge the relevant authorities in the state of Tamil Nadu to intervene on the issue and support an early hearing of the bail plea," leaders from the associations said in a joint statement. The members who signed the letter include Kris Gopalakrishnan, chairman of CII Startup Council, A Didar Singh, secretary general at FICCI, Ravi Gururaj, executive council member at NASSCOM, Sharad Sharma, cofounder of iSPIRT, Shubho Ray, president of IAMAI, Naganand Doraswamy, governing council member of TiE Bangalore, and R. Narayanan, president of TiE Chennai.

Nitish Kumar releases Bihar’s startup policy, announces Rs 500cr fund
Source: Yourstory; March 22, 2017

At the 4th Bihar Entrepreneurship Summit (BES), organised by Bihar Entrepreneurs Association, on Tuesday, Chief Minister Nitish Kumar released Bihar StartUp Policy 2017.

Bihar is among the few states in India to have a startup policy that was drafted and introduced in 2016. It was later repealed to incorporate changes based on the suggestions and feedback, and was re-launched last week. Speaking at the event, Kumar noted the various government schemes introduced to empower women and encourage the youth to take to entrepreneurship. "We have given the youth and entrepreneurs a revised startup policy, and set up a Rs 500-crore fund to encourage and facilitate entrepreneurship," he said. He also asked the committee shortlisitng the startup applications for funding to be more communicative so there was complete transparency in the selection process.

Addressing the entrepreneurs at the BES event, Jai Kumar Singh, Minister of Industries, Government of Bihar, said, ”We decided upon the startup policy in 2016, and in 2017 we implemented it too. We have given it much thought, taken expert advice and then brought out this policy because we want our youth to have the very best. Our generation used to go looking for a job, but today we want the youth to be their own boss. It is a challenge that we want our youth to accept.”

Compiled by IESA Research

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