Transcript 1.Click Here for Presentation

Meeting of US India ICT Working Group, Washington
Presentation
On
Opportunities
for
US
Industries
for
establishment
Electronic Manufacturing / Testing Facilities in India
by
NK Goyal
President CMAI Association of India,
Chairman Emeritus TEMA,
Vice Chairman ITU APT India
www.cmai.asia, [email protected]
6th June, 2012
1
of
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
2
Advantage India……contd.
 Rise of Asia presents tremendous opportunities for growth in this
Century
 India, China are two big markets
 US has opportunity to invest in Manufacturing from India to cater the
Asian market
 Huge Scope in several verticals…Health, Automobile, Aviations,
Education, Banking, Commerce
 Indian Government coming with new policies to attract investment
Advantage India……contd.
 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.
4
President USA HE Mr. Obama on India
 HE President, Mr. Obama speaking to a packed reception hall at the State
Department building in Foggy Bottom, on 4th June, 2010 quoted from an eminent
European scholar who travelled to India more than a century ago:
 “Whatever sphere of the human mind you may select for your special study,
whether it be language or religion or mythology or philosophy, whether it be law or
customs, primitive art, or science, you have to go to India, because," he said,
"some of the most valuable and instructive material of the history of man are
treasured up in India, and India only".
 HE President Mr. Obama further said: "So when it comes to the sphere of our work,
building a future of greater prosperity, opportunity and security for our people, there
is no doubt; I have to go India. But even more, I am proud to go to India, and I look
forward to the history that we will make together, progress that will be treasured not
just by this generation but by generations to come."
5
President USA HE Mr Obama on India….contd.
 White House during November, 2012 visit of President Mr. Obama, portrayed India
as an economic opportunity too golden to pass up. President in Mumbai to a
gathering of US and India business leaders said:
 “ In our interconnected world, increased commerce between The United States and
India can be and will be a win win proposition for both Nations.”
6
India Story
Transparency & Accountability
Attractive FDI location
Right to Information Act
Third most attractive FDI
location in the world
Road map for transitioning to IFRS
Corporate governance initiatives
Information Technology Act
(AT Kearney FDI
Confidence Index 2010)
Roadmap for Direct Tax Code (DTC)
and Goods and Services Tax (GST)
Cost competitiveness
Pro investment environment
City
Price Levels
(including Rent)
Net Wage Levels
•
New York
Tokyo
Taipei
Hong Kong
Beijing
Delhi
Mumbai
100
88.5
52.2
74.1
42.4
34
30.3
100
86.4
40.0
43.9
14.5
10.3
7.6
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
Source : Prices and Earnings Report August 2010, UBS
7
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.
“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.
“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
“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)
8
Electronics Systems Design and Manufacturing (ESDM) - A Priority Sector for India
Current and forecasted ESDM Demand in
India, 2009 - 2020E
USD Billion
+22%
$400B
$125B
$45B
2009
2014E
2020E
Semiconductor content in electronic system
projected to grow from 20% currently to 25% in the
next 3-5 years
Forecasted ESDM demand by segment,
2020E
Semiconductor
design Hi-Tech mnfg.
Electronics
Exports
Components
20% 15%
Others
Electronics
6%
Consumer
Mfr. Services
4%2% 1%1%
electronics
14% IT Systems
and hardware
38%
Telecom products
and equipments
9
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
10
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
11
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
12
India as a Semiconductor Destination
Key players in the semiconductor ecosystem are already building
presence in India
IDMs
Value
chain
Semi cap
equipment
EDA / IP
Foundry
ATMP
Fabless
Potential
opportunity
OEMs
DeCore
nanosemi
IDMs
Others
IIT
IISc.
13
India as a R&D Destination
India is the leading country for R&D jobs
Top 10 countries by estimated jobs in R&D
2009
India
12,120
US
7,290
China
Malaysia
France
4,000
3,080
2,460
Taiwan
2,000
Canada
1,990
UK
1,850
Ireland
1,720
Hungary
1,540
Many
outside India
are also of
Indian origin
1 Research related to characterization, fabrication and modeling
Source: IBM Global location trends, ISA-Evalueserve study 2008
14
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.
15
Electronics in Other Sectors
• Automotive Electronics - Develop Centre of Excellence (CoE) for MCUs,
MEMS and other advanced electronic devices to consolidate India’s position as
one of the global auto hubs
• Avionics: Facilitate development of R&D and outsourcing of engineering
design and related software in the country
• LED: Encourage the use of LED lighting solutions especially in rural markets
through innovative products
• Industrial Electronics - Develop a CoE for innovation with focus on affordable
standardized products for segments such as textiles, food processing, steel
etc.
• Medical Electronics: Consolidate design and development of affordable
medical electronics industry. Develop downstream manufacturing through
sector specific cluster.
• Solar Photovoltaic: Build manufacturing capacity to support the generation of
20 GW of solar power by 2020
• Information and Broadcasting: Create an eco-system for manufacture of settop boxes and other broadcast equipment in the country
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
17
Buy American Broadband Policy
 The American Recovery and Re-investment Act, 2009 includes a ‘Buy America
Provisions’ requiring that all iron, steel and manufactured goods used in public
works projects financed under the Bill should be made in the US. It is reasonable to
believe that apart from iron and steel products, lack of access to stimulus funded
project had adversely impacted other manufactured products as well.
 National Telecommunications and Information Administration (NTIA) is distributing
$4.7 billion of the $7.2 billion earmarked for broadband deployments in un served
and underserved areas
 It provides BUY American condition for optic cables, coaxial cables, cell towers and
other facilities that are in abundance in the United States
 It granted a limited waiver for switching, access, transport, routing, customer
premise and billing equipment as well as end user devices
 The Rural Utilities Service (RUS) program in the U.S. Department of Agriculture, is
in charge of giving out $2.5 billion of the stimulus money.
 Congress said funds provided under the law passed in February generally can't be
used for iron, steel and factory goods not produced in the U.S.
 Ohio order to curb off shoring (Aug 2010)
Thank You
[email protected]
+91 98 111 29879 NK Goyal
19