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Meeting of India-EU 7th Joint WG on Information Society mayti

Presentation

On

Opportunities for industries in the EU region for

establishment of Electronic Manufacturing Facilities in

India

by

NK Goyal, President CMAI Association of India

www.cmai.asia

28th March, 201228th March, 2012

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Advantage India

• GDP crossed USD 1 Trillion Mark

• 4th largest economy in world when adjusted for purchasing power parity

• Growing well in excess of 8% per annum for last three years.

• Current GDP Growth: 8.5%

• USD 380 Billion Projected infrastructure investment in next 5 years

• Large Domestic Market: - 560 million consumers in 20-49 age group expected by 2015 - 5th largest consumer market by 2025 - Increased disposable incomes & changing lifestyles

• Human capital: - Third largest pool of scientific & technical manpower (2,00,000 Engineering Gradates Annually) - Over 500 universities (20,000 colleges) - Large English speaking population

• GDP crossed USD 1 Trillion Mark

• 4th largest economy in world when adjusted for purchasing power parity

• Growing well in excess of 8% per annum for last three years.

• Current GDP Growth: 8.5%

• USD 380 Billion Projected infrastructure investment in next 5 years

• Large Domestic Market: - 560 million consumers in 20-49 age group expected by 2015 - 5th largest consumer market by 2025 - Increased disposable incomes & changing lifestyles

• Human capital: - Third largest pool of scientific & technical manpower (2,00,000 Engineering Gradates Annually) - Over 500 universities (20,000 colleges) - Large English speaking population

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Third most attractive FDI location in the world

(AT Kearney FDI Confidence Index 2010)

• 100% FDI permitted in most sectors under automatic route, includes Electronics system design and Manufacturing (ESDM)

• Consolidated FDI Policy available

• Government has come up with several incentives to encourage investment and attract capital

Right to Information Act

Road map for transitioning to IFRS

Corporate governance initiatives

Information Technology Act

Roadmap for Direct Tax Code (DTC) and Goods and Services Tax (GST)

India Story

Attractive FDI locationAttractive FDI location

Pro investment environmentPro investment environmentCost competitivenessCost competitiveness

Transparency & AccountabilityTransparency & Accountability

CityPrice Levels

(including Rent)Net Wage Levels

New York 100 100Tokyo 88.5 86.4Taipei 52.2 40.0

Hong Kong 74.1 43.9Beijing 42.4 14.5Delhi 34 10.3

Mumbai 30.3 7.6

Source : Prices and Earnings Report August 2010, UBS

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India Story – Leaders Speak

“We came to India for costs, stayed for quality and are now investing for innovation.”Dan Scheinman, SVP and GM, Cisco Systems Inc.

“We came to India for costs, stayed for quality and are now investing for innovation.”Dan Scheinman, SVP and GM, Cisco Systems Inc.

“India is a developing country, but it is developed Country as far as its intellectual infrastructure is concerned. We get the highest intellectual capital per dollar here..”

Jack Welch, Former Chairman, GE

“India is a developing country, but it is developed Country as far as its intellectual infrastructure is concerned. We get the highest intellectual capital per dollar here..”

Jack Welch, Former Chairman, GE

“India has evolved into one of the worlds leading technology centers.”Craig Barrett, ex-CEO, Intel Corp.

“India has evolved into one of the worlds leading technology centers.”Craig Barrett, ex-CEO, Intel Corp.

“By 2032 India will be among the top 3 largest economies in the world.”BRIC report, Goldman Sachs

“By 2032 India will be among the top 3 largest economies in the world.”BRIC report, Goldman Sachs

“India has taken its place in the world economy. You already have them in cars & autos, in electronics and systems.”

Jamie Dimon, Chairman and CEO JP Morgan

“India has taken its place in the world economy. You already have them in cars & autos, in electronics and systems.”

Jamie Dimon, Chairman and CEO JP Morgan

“The Indian market has been growing very fast in recent years and we have found that some Taiwanese businesses are highly complementary to Indian corporations.”

Christina Liu, Minister, Council for Economic Planning and Development (CEPD)

“The Indian market has been growing very fast in recent years and we have found that some Taiwanese businesses are highly complementary to Indian corporations.”

Christina Liu, Minister, Council for Economic Planning and Development (CEPD)

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Electronics Systems Design and Manufacturing (ESDM) - A priority sector for India

$45B

+22%

2020E

$400B

2014E

$125B

2009

Current and forecasted ESDM Demand in India, 2009 - 2020EUSD Billion

Semiconductor content in electronic system projected to grow from 20% currently to 25% in the

next 3-5 years

15%6%

1%1%14%

38%

4%2%

20%

Hi-Tech mnfg.ElectronicsComponents

Semiconductordesign

ElectronicsMfr. Services

IT Systemsand hardware

Telecom productsand equipments

Consumerelectronics

Others

Exports

Forecasted ESDM demand by segment, 2020E

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Favorable Policy Framework

• A Triad of Policies to drive a National Agenda for ICTE - National Policy on Electronics - National Policy on Information Technology - National Telecom Policy

• Vision

To create a globally competitive electronics design and manufacturing (ESDM) industry to meet the country's needs and serve the international market.

• Key Objectives

Turnover in ESDM sector of USD 400 Billion by 2020 involving:

- Investment of USD 100 Billion - Employment to 28 Million people at various levels

• Achieve global leadership in VLSI, chip design and other frontier technical areas and achieve turnover of USD 55 Billion by 2020.

• Increase export in ESDM sector from USD 5.5 Billion to USD 80 Billion by 2020

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Government Procurement of Electronics

• Multi-billion dollar investment plans in mega programs offer tremendous opportunities for electronics manufacturing:

- Roll out of Broadband to over 600,000 villages – National Optical Fibre Network (NOFN) Plan approved

- National Knowledge Network with 100GB connectivity for over 20,000 colleges and research institutions

- National eGovernance Program spanning Central Ministries and all State Governments

- National Mission to provide Computers to over 100,000 schools

- Digitization of Television Broadcast Network by 2015 - significant opportunity for Set Top Box consumption and manufacturing

- Indian Unique Identification Project (UID) offers tremendous opportunities for technology and products (Biometrics, ID Cards, etc.). 

- Roll out of 3G, Wimax and 4G

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Setting up Semiconductor Fabs

• Strong Semiconductor Design Ecosystem:

- Nearly 2000 chips designed each year; 20,000 Engineers; USD10.6 Billion Revenue by 2012 (17.3% growth rate)

- All the global top 10 fabless design companies have India operations

- 23 of the top 25 semiconductor companies have strong presence in India

• A High Level Committee set up for identifying technology and investors for

setting up semiconductor fabs

- Mandate: Assess and recommend quantum of Government support in physical / financial terms

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India as a semiconductor destination

EDA / IP OEMsSemi cap equipment

Foundry ATMP Fabless

IDMs

DeCore nanosemi

Value chain

IDMs

OthersIISc.IIT

Key players in the semiconductor ecosystem are already building presence in India Potential

opportunity

10101010

Ireland

UK

Canada

Taiwan

France

China

US

India

3,080

4,000

7,290

12,120

1,540

1,720

1,850

1,990

2,000

2,460

Hungary

India is the leading country for R&D jobs

1 Research related to characterization, fabrication and modeling

Source: IBM Global location trends, ISA-Evalueserve study 2008

India as a R&D Destination

Top 10 countries by estimated jobs in R&D 2009

Many outside India are

also of Indian origin

Malaysia Malaysia

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India: Telecom Manufacturing Opportunities

• Second largest telecom penetration, world’s highest monthly additions.

• 940 Million Subscribers: . Wireless: 910 Million

• Indian Telecom sector to witness huge investments to the tune of USD110 Billion during 2012-2017.

• Telecom Subscribers to cross 1.5 billion by 2015 and 5 billion by 2020.

• About 25 per cent (Approx. 300 million) would be 3G/4G subscribers, requiring scaling up the infrastructure.

• About USD 70 Billion estimated investment in rolling out green field 2G, 3G/4G and WiMax networks, while USD 25 Billion required to set up an extra 200,000 - odd telecom towers across the country.

• The total investment in the pan-India broadband rollout expected to be USD20 Billion while another USD 20 Billion will be invested in augmenting the transmission network.

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Opportunities for Collaboration

• Investments in potential ESDM opportunities in India including technology transfer

• Participation in Centers of Excellence in

Automotive electronics

Medical electronics

Industrial electronics

Others

• Joint R&D and innovation to develop products for India market

• Opportunity for Venture Capital Funding

• Adoption of best practices in e-waste management

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Thank YouThank You

President_cmai@cmai.asia+91 98 111 29879 NK GoyalPresident_cmai@cmai.asia+91 98 111 29879 NK Goyal

 There is no ambiguity on India's 1.21 billion population overtaking China's 1.34 billion. However, it's not just the population that would see an upward swing. The economy is set to total $5.6 trillion by 2020 from the present $1.7 trillion, achieving a real GDP growth rate of 9.2 per cent. If the Dun & Bradstreet prediction comes true, India's global economy ranking would be 7th from the present 10th

Over the next two years, India could attract FDI worth $ 80 billion, according to Morgan Stanley.

On the military front, India maintains the world's third largest active armed forces and is a nuclear weapon state too. According to Stockholm International Peace Research Institute, India is the world's largest arms importer, much ahead of China.

India, the country with high rate of illiteracy, figures among them.

India can as well aim at the Sun with the kind of expertise it has in space technology. Vast pool of talent makes it a possibility. Very few countries have the ability to launch their own satellites.

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