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Meeting of India-EU 7

th

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

28 th

March, 2012

1

Advantage India

• GDP crossed USD 1 Trillion Mark

• 4 th 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

India Story

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)

(

Attractive FDI location

Third most attractive FDI location in the world

AT Kearney FDI

Confidence Index 2010

)

Cost competitiveness

City

New York

Tokyo

Taipei

Hong Kong

Beijing

Delhi

Mumbai

Price Levels

(including Rent)

100

88.5

52.2

74.1

42.4

34

30.3

Net Wage Levels

100

86.4

40.0

43.9

14.5

10.3

7.6

Source : Prices and Earnings Report August 2010, UBS

Pro investment environment

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

3

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)

4

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

$45B

2009

+22%

$125B

2014E

$400B

2020E

Semiconductor content in electronic system projected to grow from 20% currently to 25% in the next 3-5 years

Exports

Semiconductor design

15%

20%

Others

Consumer

4%2% electronics

1%

1%

6%

14%

Hi-Tech mnfg.

Electronics

Components

Electronics

Mfr. Services

IT Systems and hardware

38%

Telecom products and equipments

5

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

6

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

7

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

8

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

OEMs

Potential opportunity

DeCore nanosemi

IDMs

Others

IIT

IISc.

9

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

US

China

Malaysia

France

Taiwan

Canada

UK

Ireland

Hungary

12,120

7,290

4,000

3,080

2,460

2,000

1,990

1,850

1,720

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

10

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.

11

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

12

Thank You

President_cmai@cmai.asia

+91 98 111 29879 NK Goyal

13

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 10 th

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.

14

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