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Electronics industry in India…..an overview N Krishnan, Director General-STPI India

Electronics industry in India…..an overview N Krishnan, Director General-STPI India. Electronics industry……on a growth path. Domestic production at USD 20 billion in 2008-09 ; exports at USD 4 billion, representing a growth of 21% over the previous year

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Electronics industry in India…..an overview N Krishnan, Director General-STPI India

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  1. Electronics industry in India…..an overview N Krishnan, Director General-STPI India

  2. Electronics industry……on a growth path • Domestic production at USD 20 billion in 2008-09 ; exports at USD 4 billion, representing a growth of 21% over the previous year • All the global top 10 fabless design companies have India operations and 22 of the top 25 semiconductor companies have design / development centers • India emerging as a preferred destination for manufacturing :- • electronics ecosystem building up • shift to increased local value addition • Industry performance in key segments – • .

  3. Government of India – Policy Initiatives : Semiconductor Policy 2007 • Government will bear 20 per cent of the capital expenditure during the first 10 years for units located inside SEZs and 25 per cent for those outside it. • Window open till March 2010. • For semiconductor manufacturing (wafer fabs) plants, the policy proposes a minimum investment of $ 625 Million and $ 220 Million for ecosystem units including ATMP • There is a ceiling of 3 Fab units and 10 ecosystem units for incentives under the policy • Key benefit is the grant of the SEZ status. • Overwhelming response to the Government’s policy – 17 proposals received envisaging investment of $ 35 billion with 15 proposals received relate to solar photo-voltaic manufacturing • Government of India has given in-principle approval to 12 proposals • Great opportunity to leverage the policy incentives for ATMP operations This policy is applicable for manufacturers of all semiconductors, displays including LCDs, organic light emitting diodes, plasma display panels and any other emerging displays, storage devices, solar cells; photo voltaic; other advanced micro- and nanotechnology products; assembly and test

  4. SEZ incentives Government of India • No license required for import. • Exemption from customs duty on import of capital goods, raw materials, consumables, spares etc. • Exemption from Central Excise duty on procurement of capital goods, rawmaterials, consumable spares etc. from the domestic market. • Supplies from DTA to SEZ units treated as deemed exports. • Reimbursement of Central Sales Tax paid on domestic purchases. • For profits arising out of direct exports (physical exports to outside India): 100% income tax exemption for a block of five years,50% tax exemptions for five years and up to 50% of the Profits ploughed back for next 5 years under section 10-A of Income tax Act

  5. India insourcing advantage • Overall 7% to 10% reduction compared to current scenario • Shipping Cost 1 to 2 % • Customs clearance, logistics • Air Cargo • Import Duty • Domestic Tariff Area (DTA) 4% • Inventory Cost 1 % to 3% • Carrying cost of product ( packaged parts is costlier … based on ASP) • “Unused” products need to be shipped back to supplier • Hold inventory in wafers • Cycle time reduction in manufacturing chain • Assemble only when required … 5 days turn – JIT • Build product that is required; no waste • After Sales Support and replacements • Replacements for defective, low yield products • Major opportunity to reduce cost and improve customer satisfaction

  6. Advantage India India advantage Local Market • Growing economy and a large potential market • Global recognition for back-end services: • A proven case for IP, embedded systems and IC design • Attractive for Manufacturing Investments • Skilled employee base • Strong R&D capabilities • Fast and upcoming modern infrastructure (SEZs) • Proximity to EU and MEA market • Freight Cost cheaper than China - Faster delivery and lesser pipeline of inventory Profit from local Sales Harness low cost manufacturing base to service local, European and MEA markets • Use India for IP Services • New product development • Engineering services Manufacture Back-end Services India is a great Opportunity –triple advantage

  7. Come….explore….be a part of the great Indian opportunity!Thank youdgoffice@hq.stpi.in

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