Meeting of US India ICT Working Group, Washington

1
Meeting of US India ICT Working Group, Washington
Presentation On Opportunities for US
Industries for establishment of 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,
president_cmai_at_cmai.asia
6th June, 2012
2
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)

3
Advantage Indiacontd.

• 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 verticalsHealth,
  Automobile, Aviations, Education, Banking,
  Commerce
• Indian Government coming with new policies to
  attract investment

4
Advantage Indiacontd.

• 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.

5
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."

6
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.

7
India
Story
Attractive FDI location
Transparency Accountability

• 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)

Third most attractive FDI location in the world
(AT Kearney FDI Confidence Index 2010)
Cost competitiveness
Pro investment environment
City Price Levels(including Rent) Net Wage Levels
New York 100 100
Tokyo 88.5 86.4
Taipei 52.2 40.0
Hong Kong 74.1 43.9
Beijing 42.4 14.5
Delhi 34 10.3
Mumbai 30.3 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
8
India Story Leaders
Speak
9
Electronics Systems Design and Manufacturing
(ESDM) - A Priority Sector for India
Current and forecasted ESDM Demand in India, 2009
- 2020E USD Billion
Forecasted ESDM demand by segment, 2020E
Semiconductor design
22
400B
Hi-Tech mnfg.
Electronics Components
Exports
15
20
125B
Others
Electronics Mfr. Services
6
45B
Consumer electronics
2
1
4
1
14
IT Systems and hardware
2020E
2014E
2009
38
Telecom products and equipments
Semiconductor content in electronic system
projected to grow from 20 currently to 25 in
the next 3-5 years
10
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

11
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.). 

12
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

13
India as a Semiconductor
Destination
Key players in the semiconductor ecosystem are
already building presence in India
Potential opportunity
IDMs
OEMs
Semi cap equipment
Foundry
ATMP
Fabless
EDA / IP
Value chain
DeCore nanosemi
IDMs
Others
IISc.
14
India as a RD Destination
India is the leading country for RD jobs
Top 10 countries by estimated jobs in RD 2009
India
12,120
US
7,290
China
4,000
Malaysia
3,080
France
2,460
Taiwan
2,000
Many outside India are also of Indian origin
Canada
1,990
UK
1,850
Ireland
1,720
1,540
Hungary
1 Research related to characterization,
fabrication and modeling Source IBM Global
location trends, ISA-Evalueserve study 2008
15
India Telecom Manufacturing Opportunities

• Second largest telecom penetration, worlds
  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.

16
Electronics in Other Sectors

• Automotive Electronics - Develop Centre of
  Excellence (CoE) for MCUs, MEMS and other
  advanced electronic devices to consolidate
  Indias position as one of the global auto hubs
• Avionics Facilitate development of RD 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 set-top boxes and
  other broadcast equipment in the country

17
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 RD and innovation to develop products for
  India market
• Opportunity for Venture Capital Funding
• Adoption of best practices in e-waste management

18
Buy Bu 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)

19
Thank You
President_cmai_at_cmai.asia 91 98 111 29879 NK
Goyal