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  IESA WINWire May 13, 2017 - May 19, 2017 for Subscription click here  
12th Anniversary

From "Make in India" to "Buy in India": domestic firms to get boost
Source: Domain B; May 13, 2017

http://www.domain-b.com/economy/general/20170513_domestic.html

Prime Minister Narendra Modi's 'swadeshi' policy seems to be enlarging its scope from 'Make in India' to also 'Buy in India'. Reports today said a mega policy is in the works for several key sectors where domestic procurement should be given preference.

According to The Economic Times citing sources, the government will bring out a full-fledged price preference policy favouring Indian-owned companies. The policy, likely to be finalised by end of May, is being driven by the Prime Minister's Office and is aimed at boosting Indian enterprises across sectors.

Preferential pricing is expected to allow additional time to Indian-owned companies so that they can match the lowest bid by an entity that's partly Indian-owned or mostly foreign-owned.

Business Standard cited its sources to say that the PMO recently had a meeting on the contours of the proposed policy.

The sectors that the new policy could cover are likely to be those where the government is the largest consumer, such as engineering, machinery and paper among others, the BS report said.

Cement is another such sector but most of the consumption in the sector is from domestic manufacturers in any case.

The union government already incentivises local procurement in areas like petroleum and steel, but the new policy is expected to be much larger in scope.

Any policy on preferential domestic procurement could imply job creation, a priority area for the Narendra Modi government. Despite signature schemes such as Make In India and Start Up India, job creation has remained a problem.

Govt to set up specialised defence procurement organization
Source: The Times of India; May 15, 2017

http://timesofindia.indiatimes.com/india/govt-to-set-up-specialised-defence-procurement-organisation/articleshow/58675462.cms

India does not get enough bang for its buck in the arms business. With this in mind, the defence ministry is now looking to create a specialised defence procurement organisation (DPO) to streamline mega arms acquisitions as well as leverage them to build a robust defence industrial base (DIB) in the country.

Defence ministry sources said creation of the DPO as "a strategic imperative for longterm self-reliance" would be the second big-ticket defence reform to be set in motion after the "strategic partnership (SP)" policy is finalised to boost the private sector's role in defence production.

The SP policy, under which select Indian private sector companies will be nominated to jointly produce weapons systems with global armament companies, is slated for discussion in the defence acquisitions council (DAC) meeting to be chaired by defence minister Arun Jaitley on Monday, as was earlier reported by TOI.

"Once the SP policy is hopefully cleared this month, the focus will shift to setting up the DPO. Jaitley has already received detailed presentations on the DPO, whose main aim will be to use India's arms procurement clout to build a strong DIB," said a source.

The "professional and empowered" DPO, which was recommended by the Pritam Singh committee, will "amalgamate" what the defence ministry currently does in "a fragmented and isolated manner" by integrating the longwinded and cumbersome arms acquisitions, offsets, defence production and other such processes.

Companies will have to declare job creation estimates to avail benefits under Startup India
Source: The Economic Times; May 15, 2017

http://economictimes.indiatimes.com/small-biz/startups/companies-will-have-to-declare-job-creation-estimates-to-avail-benefits-under-startup-india/articleshow/58674483.cms

Companies eyeing benefits under the Startup India programme will soon have to declare upfront how many jobs they will create in order to qualify as the government moves to make employment generation the guiding principle for all its major programmes.

"We will soon notify the new definition for startups, which goes beyond innovation," a senior government official said. Innovation is currently the main criterion for startups to qualify for benefits such as tax holidays and fast-track patent filing under Startup India.

To qualify as a startup under the new definition, an entity would have to declare its job creation target and meet certain financial standards besides having a certain level of innovation in its product or service. "We will do our own scrutiny at the time of examination of applications for giving the tax benefits," the official said.

When PM Narendra Modi launched the Startup India initiative in January 2016, one of its main thrusts was to create employment opportunities for the youth, but it was not included as a mandatory requirement.

The initiative has not yet taken off in a big way, as only 10 startups have been approved for availing of the tax benefit by an inter-ministerial board.

DIPP has recognised 798 applications as startups but not given them the tax benefit. Companies incorporated after March 31, 2016, could avail of a three-year tax holiday in the first seven years of their existence under the Startup India initiative.

Chinese, US tech corporates re-energise Indian startups
Source: The Times of India; May 15, 2017

http://timesofindia.indiatimes.com/business/india-business/chinese-us-tech-corporates-re-energise-indian-startups/articleshow/58676761.cms

There's a startup funding revival in 2017, and it is being driven by Chinese and US tech companies. In 2015, it were hedge funds and pension funds that played a big role in large funding rounds, and it was their retreat that led to the slowdown of 2016. But now, corporate funds have come to the rescue of select startups in the country.

Consider these cases: Microsoft, Tencent and eBay-led Flipkart's recent $1.4-billion funding. SoftBank bankrolled Oyo and Ola. Tencent put money into Practo again this year. Alibaba infused more cash into Paytm late last year and again this year. Logistics startup Delhivery raised $100 million from Chinese firm Fosun. In the second half of last year, Tencent and Foxconn had invested in Hike.

"Microsoft and Tencent look for strategic opportunities and have a 15-20 year cycle. This is in line with the general optimism of India as a market. Hedge funds are opportunistic and invested in the Indian market because of the fear of missing out on a great opportunity," said Rutvik Doshi, director at VC firm Inventus Capital Partners.He said it's good the correction has happened quickly.

He described the hedge fund boom in 2015 as India's version of the dotcom boom. "The hedge funds came to India at a time when the consumer industry over-estimated India's market size, as well as growth prospects of the Indian online consumer companies," Doshi said.

Telangana says sops to Apple will help industry
Source: The Hindu Business Line; May 15, 2017

http://www.thehindubusinessline.com/news/national/apple-t-wallet/article9699923.ece

The Telangana government has said that duty exemptions would help the electronics manufacturing ecosystem in the country.

“We feel that any exemptions (as asked by Apple) will help the overall industry. A strong ecosystem would give a fillip to electronic manufacturing,” Telangana IT and Industry Minister KT Rama Rao has said.

“Electronic manufacturing is not about assembling. You should have foundries and other components to really have a good manufacturing base,” he said.

Addressing reporters on the sidelines of ICT4D (ICT for Development) conference here on Monday, he refused to comment on the Apple’s likely plans to locate a manufacturing unit in the country. “They are secretive about it,” he said.

The IT Minister said monthly digital transactions in the State crossed the 20-crore mark. “We will release T-Wallet (digital payment app) soon. We have completed testing part. We will converge all the government agencies to let people pay using the wallet,” he said.

He said about 3,000 Wi-Fi hotspots would be established in Hyderabad in the next three to four months. “Of these, 1,000 will be set up by ACT by June. The other two thousand sites will be established by other service providers. We would like to have seamless Internet services in the city,” Rao said.

He said the IT industry’s growth rate in the State was higher than the national average. “We would come out with a report card on the growth of the industry next month,” he said.

NASSCOM dismisses reports of mass layoffs by IT firms
Source: Computer World; May 15, 2017

http://www.computerworld.in/media-releases/nasscom-dismisses-reports-mass-layoffs-it-firms

Commenting on recent media reports of mass layoffs by IT companies in India, National Association of Software and Services Companies (NASSCOM) released a statement saying such reports are incorrect. The statement says the IT industry continues to be a net hirer with over 1.5 lac people being employed on a net basis each year, though the focus is shifting from scale to skill. “Talent and skills are the key building blocks for the industry which is intensifying investment in skilling/reskilling its workforce to strengthen its foundation on a continuous basis,” said NASSCOM

The apex Indian IT body says that although workforce realignment is a periodic feature of the industry, it has not been observed this year. “Workforce realignment linked to performance appraisal processes is a regular feature every year. Skilling and workforce realignment are essential to remain competitive in international markets. It needs to be appreciated that such workforce realignment is a normal part of the internal process of companies based on their own operational imperatives; companies evaluate their priorities and business imperatives and continuously align talent to serve their needs and enhance competitiveness. It is reiterated that no significant changes have been reported or observed this year,” said NASSCOM.

Applications invited for incubation prog at IIT-P
Source: The Times of India; May 16, 2017

http://timesofindia.indiatimes.com/city/patna/applications-invited-for-incubation-prog-at-iit-p/articleshow/58686942.cms

The Incubation Centre of Indian Institute of Technology Patna (IC-IITP) has called budding entrepreneurs with prospective startups in the area of electronics system design and manufacturing (ESDM) and medical electronics for enrolment in the fourth batch of the programme. The last date to submit the business plan is June 30.

Sources in IC-IITP said they aim to identify, nurture and translate technology ideas and innovation into ESDM with a focus on medical electronics. The business plan submitted should be of about 10 pages, covering value proposition, management team profile, advisory board profile products and services portfolio, approach and infrastructure requirements for technical implementation, market potential analysis, funding requirements and capital structure, risk analysis and projected financials.

IC-IITP official Alok Kumar said, "A project evaluation team, comprising eminent personalities from industry, academia, government and investment community will evaluate the business plans. The shortlisted applicants will be called for a presentation before an expert panel. Based on the panel's recommendation, the applicant will be offered admission to the incubation programme. Only 25 business plans will be selected for this."

The two-year programme is designed to support startups for idea validation, product development, building and testing prototypes and early-stage scaling of innovations. "The various facilities that will be provided to the startups include a fully-furnished office space, research and development, business mentoring, support by incubator team, investor connect and training and development," Alok said.

Jaitley gives fillip to Modi's agenda to make 'New India'
Source: Business Standard; May 16, 2017

http://www.business-standard.com/article/news-ani/jaitley-gives-fillip-to-modi-s-agenda-to-make-new-india-117051601306_1.html

The Ministry of Finance led by Arun Jaitley has been working tirelessly to fulfill the agenda of Prime Minister Narendra Modi of providing a cashless, corruption less clean governance to make New India.

While the finance ministry continues to bear the pressure of eradicating black money post demonetisation, it does every bit to transform Modi's vision into reality.

It seems that Modi has acknowledged a fact made public by former Prime Minister Rajiv Gandhi that "only 10 paisa out of one Rupee reaches to the actual beneficiaries of the government's welfare scheme". And, hence his main thrust is on providing direct benefit to the beneficiaries of the government schemes.

Considering the importance of Direct Benefit Transfer (DBT) scheme , the finance ministry released Rs. 1,02,786.77 crore under in the form of direct transfers to beneficiaries of different government programmes, like- National Rural Employment Guarantee Act (MGNREGA), National Horticulture Mission (NHM) and food subsidy, etcetera- till February 2017.

In order to take care of the pockets of the employees, the government issued the Resolution and the Central Civil Services (Revised Pay) Rules, 2016 on July 25, 2016.

The finance ministry says that this will benefit about 47 lakh Central Government employees and 53 lakh pensioners.

To provide the relief to the pensioners, the government approved modifications in the 7th Central Pay Commission Recommendations on Pay and Pensionary benefits on May 3, 2017.

Samsung looks beyond smartphones, bets next on complex medicines to treat diseases like cancer
Source: The Financial Express; May 16, 2017

http://www.financialexpress.com/industry/samsung-looks-beyond-smartphones-bets-next-on-complex-medicines-to-treat-diseases-like-cancer/671091/

The Samsung brand is best known for its smartphones and wide-screen TVs. Yet behind the scenes, the conglomerate is also making a name as a contract manufacturer of complex medicines to treat diseases like cancer. On a piece of reclaimed land along the western coast of South Korea, Samsung BioLogics Co. is building a $740 million factory that will give it the capacity to become the No. 1 producer by volume of a class of drugs called biologics, many of which are derived from mammal cells.

The Samsung group diversified into the pharmaceutical sector in 2011. Now, it’s mobilizing its expertise in semiconductor making and engineering know-how to make the way biologics are produced on behalf of Big Pharma more efficient. The market for biologic medicines, which are used for everything from cancer to arthritis, is projected to exceed $223.7 billion by 2021, according to a Bloomberg Intelligence analysis.

Being a force in biologics is crucial to Samsung — and South Korea. Galaxy smartphones and other consumer electronics face intense competition from Apple Inc. and Chinese brands such as Huawei Technologies Co., and the chaebol is grappling with the arrest of de facto leader Jay Y. Lee in a scandal that brought down the country’s former president. Meanwhile, the broader economy needs new industries as shipbuilding and heavy manufacturing slow.

If the past 40 years of global economic growth were fueled by technology, said Kim Tae-han, chief executive officer of Samsung BioLogics, the next will be fueled by where that converges with health care.

Foxconn seeking 13 acres land in JNPT SEZ, says Nitin Gadkari
Source: Mint; May 17, 2017

http://www.livemint.com/Companies/g8yGhL3LOCZzgZMd88jPrL/Foxconn-seeking-13-acres-land-in-JNPT-SEZ-says-Nitin-Gadkar.html

Foxconn Technology Group, which manufactures iPhones for Apple Inc., has sought 13 acres of land in the Jawaharlal Nehru Port Trust’s (JNPT) special economic zone (SEZ) in Mumbai, according to shipping and roads minister Nitin Gadkari.

The minister said he has spoken to Maharashtra chief minister Devendra Fadnavis about this but declined to share more details.

It isn’t immediately clear if Foxconn’s request has anything to do with the many projects it has already announced in India, especially in Maharashtra. A Foxconn spokesperson did not immediately respond to an email seeking comment.

The Taiwan-based contract manufacturer, which also makes Apple’s iPads and Microsoft’s Xboxes, has submitted a proposal to the Indian government to revive the Nokia facility at Sriperumbudur in Tamil Nadu which was shut down in 2014 due to a tax dispute of Rs21,000 crore between the Finnish company and Indian tax authorities— rendering thousands jobless. The factory was excluded from Microsoft’s $7.2 billion purchase of Nokia’s global phone operations two years ago.

In 2015, Foxconn had announced it would set up 12 factories in India, creating about 1 million jobs. The same year, it signed an exploratory agreement with Maharashtra to set up an electronics manufacturing plant in the state, investing $5 billion over five years.

JNPT chairman Anil Diggikar confirmed that Foxconn was looking to buy land in the SEZ but said the talks were at an early stage.

Jharkhand’s transition into an investment hub
Source: Electronics B2B; May 17, 2017

http://www.electronicsb2b.com/eb-specials/leaders-talk-eb-specials/jharkhands-transition-investment-hub/

The state of Jharkhand is preparing for a revolution in the ESDM sector. In a recent candid conversation with members of the Electronics Bazaar team, the honourable Chief Minister of Jharkhand, Raghubar Das, discussed some of the initiatives that have already been undertaken in this direction and the roadmap ahead. “Industrialists are attracted to a state when they see some favourable policies being brought out by the state government that will ensure profitable business for the investors and for that particular state, as well as the consumers. The state of Jharkhand has immense potential in many fields, whether it is IT, manufacturing, tourism, industries, food processing or textiles. Its capital city, Ranchi, is very strategically located, and industries can reach out to their consumers in West Bengal, Bihar and Orissa, very efficiently, from here.

In order to attract more and more investors, the Jharkhand state government has formulated approximately 12-13 policies related to industry. Based on these policies, we have organised a very successful global summit that helped us draw the attention of investors from different sectors like textiles, IT, cement, steel, food processing, etc. We have been successful in attracting a substantial number of investors”.

To facilitate investments and improve investor confidence, the government of Jharkhand is taking up multiple initiatives to improve the ease of doing business in the state. The emphasis has been not only on strengthening standard operating procedures but also on simplifying them by introducing information technology.

Bengaluru made iPhone to be out in June
Source: Deccan Herald; May 18, 2017

http://m.deccanherald.com/index.php?url=/content/612190/bengaluru-made-iphone-june.html&secid=1

Apple has commenced assembly of select models of its iconic iPhones at its Bengaluru facility. Apple’s original equipment manufacturer, Wistron of Taiwan, will commence trial production within a week and ship to dealers in domestic market. To begin with, Apple has started assembling iPhone SE model at the Bengaluru facility under its Make in India initiative.

If Wistron commences production of iPhone SE within a week, Apple can hit the shelves across the country during the first week of June. According to an official from India Electronics and Semiconductor Association (IESA), Wistron officials visited Bengaluru earlier this week and held discussions with the state government officials and shared details of their production.

"Wistron has already purchased a manufacturing facility in Peenya and along with that they have made further investment to expand the capacity of the unit,” said an IESA source. An Apple official confirmed the development to DH and explained their game plan on manufacturing in Bengaluru. "We are beginning initial production of a small number of iPhone SE handsets in Bengaluru. iPhone SE is the most popular and powerful phone with a four-inch display and we will begin shipping to domestic customers this month,” said the Apple official.

The smartphone is likely to be priced in the range of Rs 27,000 for Indian market. Wistron received certification from the Bureau of Indian Standards (BIS) in March to manufacture iPhone SE from an assembly facility in Bengaluru.

Are electronic imports the new gold for the Indian economy?
Source: Livemint; May 16, 2017

http://www.livemint.com/Politics/LfLrcWeYj6UXN5leAYyEWI/Are-electronic-imports-the-new-gold-for-the-Indian-economy.html

The obsession of Indian consumers with electronic items, chiefly mobile phones, seems to have trumped demand for gold, at least for now.

At $4.4 billion, electronic imports outpaced gold imports of $3.8 billion in April.

For the first 11 months of 2016-17 (April-February), gold imports contracted 24.5% to $23.1 billion, while electronic imports picked up 2.6% at a time overall imports fell 3.7%.

While the demand for electronics hardware in India is projected to increase to $400 billion by 2020, the estimated domestic production could rise to $104 billion only, creating a gap of $296 billion, which has to be met through imports, according to a report by Deloitte Touche Tohmatsu India Pvt. Ltd.

India imports 65% of its current demand for electronic products. If the situation is left unchanged, the country’s electronics import bill may well surpass its oil import expenses by 2020, the report says. Electronic items are the third-most valued category of imports after petroleum products and gold. While India’s fascination for the yellow metal is well-established and the government, from time to time, imposes restrictions on it, at least part of this gold is re-exported in the form of jewellery which is not the case with electronic items.

India imports most of its electronic equipment, including smartphones, from China. According to commerce ministry data, import of phones and accessories grew from $665.47 million in 2003-04 to $14.3 billion in 11 months of 2016-17 till February.

Panasonic India to set up CoE in collaboration with TCS
Source: ETCIO.com; May 18, 2017

http://cio.economictimes.indiatimes.com/news/corporate-news/panasonic-india-to-set-up-coe-in-collaboration-with-tcs/58734043

Panasonic India, one of the leading electronics and consumer appliance manufacturer today announced its first India Innovation Centre (IIC).

The Centre of Excellence (CoE) in association with Tata Consultancy Services (TCS) is under the aegis of IIC will be act as innovation hub based in Bangalore. The platform will bring the best minds from the country together to develop transformative solutions on Panasonic’s five key focus areas – Connected/ Community, Mobility, Energy, Industrial and Finance Solutions. This state of the art facility will be located at TCS campus in Bengaluru.

The CoE will focus on open innovation in the consumer electronic space and leverage the technology already available with Panasonic India, and create geography centric USPs to develop innovative solutions. TCS will bring in industry know-how, best and global Innovation practices to create an ecosystem for Panasonic to shape the future product strategy and enable digital transformation.

“Centre of Excellence is the first leg for India Innovation Centre and will be based in Bangalore. The key focus of this enterprise will be to bring together the Panasonic’s research and development efforts under one cohesive umbrella. This will also strengthen India’s position as a critical region for the corporation to lead innovations in the ISAMEA (India, South Asia, Middle East and Africa) market. It will work as a hub that will be central to developing new age technology driven range of products that will emerge from India for both domestic and global consumption,” said Daizo Ito, Managing Executive Officer.

Auto comp sector to grow at 8-9% CAGR
Source: Moneycontrol.com; May 18, 2017

http://www.moneycontrol.com/news/trends/expert-columns-2/auto-comp-sector-to-grow-at-8-9-cagr-2282629.html

The Indian auto components industry is expected to witness significant shifts given the evolving regulatory landscape and trends in the underlying automotive sector. The Indian auto component industry is expected to grow at about 8-9% CAGR over FY 2016-18 on the back of demand in the passenger vehicle and two-wheeler segments.

Original equipment manufacturers (OEMs) comprise about 65% of demand, of which passenger vehicles and two wheelers contribute about 80%. India is fast emerging as a global hub for auto R & D and the Government’s policies to drive local manufacturing is providing an impetus to the sector.

The automobile market is witnessing three broad mega trends globally, as well as in India. These are:

‘Green’ era-Growing concerns over environmental pollution and global warming is driving the market towards stricter norms and alternate fuel technologies

Increased focus on safety – Safety norms are becoming stringent globally as well as India

Growing electronic content – Emission norms and increasing focus on autonomous technologies is leading to higher electronic content

Stricter emission and safety norms are necessitating higher electronic content in the form of electronic control units, electronic braking and air suspension systems. On board diagnostics is necessitating the use of sensors and actuators. Strict emission norms will also necessitate use of low-weight components for better fuel economy leading to a direct impact on the engine & engine parts segment. Safety norms will boost demand for safety equipment such as airbags, automatic brake systems (ABS), rear view sensors and speed warning systems.

Ravi Shankar Prasad launches Tata Consultancy BPO in Patna
Source: Tech Observer; May 18, 2017

https://techobserver.in/article/news/ravi-shankar-prasad-launches-tata-consultancy-bpo-patna

Union minister for Electronics & IT Ravi Shankar Prasad launched BPO centre in Patna run by Tata Consultancy services under the new policy for incentivising BPO employment in smaller towns by central government.

“India BPO promotion scheme aims at providing 48,300 seats in small towns of India and is expected to generate 1.6 lakh jobs in small towns. A number of BPOs under the scheme are ready to start functioning. The Hon’ble Prime Minister is going to launch one thousand seats BPO set up by TCS in Varanasi shortly to be followed by another BPO in Nasik,” said Prasad.

The minister said that the 1000 seat business processing center in Patna under Digital India Program will not only help in furthering investment environment in Patna but also catalyze economic activity in an around the capital of Bihar.

Till now over 70 companies have been declared successful set up BPO/ITES operations for around 50,000 seats distributed around 60 locations in 90 States and 2 Union territories, he informed.

“As far as Bihar is concerned a total of 4,600 seats have been allotted and so far 1,910 seats have been allocated to 10 successful companies. The scheme will generate about 5,760 employment opportunities and on the completion of initiatives in the State nearly 14,000 jobs will be created, he added.

Compiled by IESA Research

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