Post on 28-Mar-2021
Electronic Manufacturing Cluster, Naya Raipur
Introduction- ESDM Sector
Electronics industry, especially consumer electronics, emerged in the 20th century and has now
become a global industry worth billions of dollars. Contemporary society uses all manner of electronic
devices built in automated or semi-automated factories operated by the industry.
Electronics industry reported at USD 1.75 trillion in 2012 is the largest and fastest growing industry in
the world. It is expected to reach USD 2.4 trillion by 2020. Demand in the Indian market was USD 45
billion in 2008-09 and is expected to reach USD 400 billion by 2020. Domestic demand is expected to
be driven by the growth in income levels leading to higher take-off of electronic products, automation
demands of corporate sector, and Government’s focus on e-governance. Domestic production in
2008-09 was around USD 20 billion. However, actual value addition in the domestically produced
electronic product is very low, ranging from 5-10% in most cases. At the current rate of growth, the
domestic production can cater to a demand of USD 152 billion in 2020 as against a demand of USD
400 billion and rest would have to be met by imports. This aggregates to a demand supply gap of
nearly USD 248 billion by 2020. Unless the situation is corrected, it is likely that by 2020, the
electronics import may far exceed oil imports.
Value Chain Analysis
There are mainly three levels in the ESDM value chain, namely, Supply base, Original Equipment
Manufacturing (OEM), and Distribution & Retail channels. Figure below depicts the value chain map
for the ESDM industry.
Exhibit 1: Value chain of ESDM sector
It can be observed from above map that the ESDM value chain starts with the Supply base which
comprises of activities such as component manufacturing, semiconductor fabrication, contract
manufacturing, and original design manufacturing (ODM). Constant flow of raw materials such as
silicon is very crucial for the existence and survival of the mentioned units at this level.
Components manufactured at the first level are shipped to the second level where assembling
happens at Original Equipment Manufacturing (OEM) units. At this level, final consumer electronics &
related items such as Computers, Televisions, Mobile phones, Server and storage devices, Medical
electronics, Industrial electronics, Military and aerospace electronics, etc. are manufactured,
configured and packaged. Packaged electronic items then enter the distribution and retail channel
where those are distributed to the end consumers by distribution and channel partners either through
retail shops or through online shops. End consumers include individual household, commercial
establishments and business units.
Some of the key players in the electronics industry are IBM, Fujitsu, Siemens, Hewlett-Packard, Dell,
Apple, Acer, Lenovo, Xerox, Epson, Kodak, Cannon, Toshiba, Sony, Microsoft, Samsung, LG,
Hitachi, HTC, Philips, Seagate, Alcatel, Cisco, Motorola, Huawei, Ericsson, Nokia, Tellabs, Toyota,
General Motors, Renault, Bosch, Rockwell, and Boeing.
Existing scenario
This section discusses about the existing situation of the ESDM sector at three levels – Global,
National and State levels.
Global Scenario
The global electronics production was estimated at USD 2.1 trillion for 2013, which grew by 20% over
the year 2012 and 5.1% year on year. Since the expansion of the markets for personal mobile
terminals and automobiles will lead to greater production of electronic components, semiconductors
and display devices, production by the global electronics and IT industries is expected to grow at a
modest 4.9% per annum to reach USD 2.3 trillion in 2014. According to the World Semiconductor
Trade Statistics, global semiconductor industry’s sales are estimated at USD 306 billion in 2013, a
4.8% increase compared to 2012. Chart below depicts the segment-wise breakdown of global
electronics sales.
Exhibit 2: Segment wise breakdown, worldwide electronics production 2013
Source: Japan Electronics and Information Technology Industries Association, December 2013
Report
It can be observed from the above chart that Computers and peripherals is the largest segment
comprising 27% of the total global electronics sale followed by communication equipment segment
with 23% share. Semiconductors and Electronic components form 16% and 11% of the total global
electronics sale respectively.
9%
23%
27%
7%
11%
8%
16%
AV Equipment
Communications
Computer and InformationTerminals
Other electronic equipment
Electronic components
Display devices
Semiconductors
Indian Scenario
ESDM industry in India is estimated to have clocked revenues of USD 75.6 billion in 2013, growing at
by CAGR 6.4%. ESDM industry in India constitutes the following sub-segments:
► Electronic products – This includes the total market for domestic consumption of electronic
products in India (either produced locally or imported) as well as the exports of electronic
products manufactured in the country.
► Electronic components – This includes the revenues generated from local manufacturing of
electronic components.
► Semiconductor design – This includes the revenues generated from semiconductor design
activities conducted in the country by local players and captives of semiconductor MNCs
operating from India. It includes revenues from embedded software, VLSI and hardware/board
design.
► Electronic Manufacturing Services (EMS) – This includes the revenues generated from EMS
services delivered from the country.
While the first two components represent the products, the remaining two are more service based
opportunities catering to the domestic and export markets. Electronic products segment forms the
biggest chunk of the ESDM industry in India with an estimated 79% market share in 2013. While
semiconductor design forms 15% of the market, electronic components and EMS services form a very
small portion with 5% and 1% revenue contribution respectively. Chart below depicts the break-up of
industry revenues for ESDM by categories.
Exhibit 3: Indian ESDM Industry Revenues Breakup as of 2013
Source: IESA – F&S Study
It can be observed from above chart that Product revenues constitute the majority of ESDM industry
revenues with 84% market share in 2013 while services revenues account for the remaining 16%.
Product-Services revenue contribution mix is expected to remain similar till 2015. Domestic revenues
accounted for 70% of the industry revenues in 2013 while exports accounted for remaining 30%. Most
79%
5%
15% 1%
Electronic Products
Electronic Components
Seminconductor Design
Electronic ManufacturingServices
of the export revenues are generated from the export of semiconductor design and electronic
products while electronic components and electronic manufacturing services constituting a small
portion of exports.
The robust growth of Indian electronic industry can be attributed to a multitude of factors, including
Growing middle class population; Increasing disposable income and declining electronic product
prices; and Government initiatives such as Spending on laptops & tablets, E-governance initiatives
and Unique Identification (UID) project, Roll out of National Knowledge Network (NKN), Broadband
connectivity to villages, and Roll out of 3G/LTE networks.
Chhattisgarh Scenario
As of now, there is minimal presence of ESDM sector in the state. However, with its inherent
strengths, the state has immense potential to become an ESDM hub of the country.
Chhattisgarh has emerged as a lucrative investment hub among its competing states with sectors like
power, mining and minerals, manufacturing, sponge iron and steel, IT/ITes, biotechnology, food
processing, etc. becoming key investment drivers and has attracted both domestic and foreign
investment over the past few years. The state is steadily garnering support from the investors,
transforming it to a manufacturing and power hub of the country. While the state administration is
based in Raipur, a new capital for Chhattisgarh at Naya Raipur has been developed. Chhattisgarh is
poised to become the next ESDM hub of India with the availability of enabling infrastructure, minerals
and talent pool. Figure below presents advantages of the state for ESDM sector to prosper.
Exhibit 4: Advantage Chhattisgarh as ESDM Destination
Chhattisgarh strengths, in terms of abundant mineral resources, cheap and reliable power, adequate
water availability, better connectivity via roads, airports and railways, and availability of talent pool
with presence of reputed academic, research and training institutes, make it a hot bed for investments
in the ESDM sector. Besides above advantages, Chhattisgarh provides efficient environment for
doing business in the state.
Project Brief- Electronic Manufacturing Cluster, Naya Raipur
Naya Raipur, the new capital city of Chhattisgarh offers a plethora of opportunities for development of
industrial infrastructure in the State. Naya Raipur houses world class amenities like Knowledge
Center with university, research and institutional complexes, 18-hole Golf Course, Theme Township,
Convention Centre, Shopping Malls and Multiplexes. Naya Raipur provides for an ideal location for
development of non-polluting light & service industries in the State. Naya Raipur has around 8000
Hectare land which can potentially be utilized for industrial development.
Exhibit 5: Advantage Naya Raipur
Chhattisgarh State Industrial Development Corporation (CSIDC) in its endeavor of development of the
industrial infrastructure in the state has identified area to an extent of 28.32 hectare at Naya Raipur
for development of Electronic Manufacturing Cluster in the region.
The Project
DeitY, GoI has granted in-principle approval to the proposed Electronic Manufacturing cluster (EMC),
Naya Raipur. The proposed EMC is aimed at providing one stop integrated facilities with
manufacturing support, welfare and common infrastructure facilities to the prospective electronics
manufacturing industries. The proposed EMC is envisaged to house world class eco system for
electronics manufacturing industries. The broad list of support manufacturing facilities proposed in the
EMC is listed below.
► Product design house – CAD/CAM, 3d modelling, animation, etc.
► Tool room – Computerised Numerical Control (CNC), multi cavity melting machines, etc.
► Testing, calibration and certification facility
► Printing and packaging facilities
Site Suitability Assessment
The identified land at Naya Raipur is located at village Tutla and is spread over 28.32 hectares of
land. The site is located in the sector 22 of Naya Raipur and has excellent connectivity through NH-43
and NH-6. An IT SEZ is also proposed in the vicinity of the proposed location. Swami Vivekananda
Airport is situated at a distance of only 7 km from the proposed location of ESDM Park. The site
enjoys abundant water supply from the Mahanadi river and also have also sufficient power connection
to cater the needs of operation in ESDM Park. The location map for the proposed site is as set out
below.
Exhibit 6: Location of the Proposed EMC
The proposed site is in the possession of CSIDC and is well connected with the other parts of the
country through rail and road network. The connectivity is depicted in the figure below.
Exhibit 7: Connectivity of Naya Raipur
Assessments of the key infrastructure availability in the catchment area of the Project Site suggest
that the catchment region is well equipped with the sector enabling infrastructure. The key
infrastructure parameters in Naya Raipur have been assessed below.
Exhibit 8: Key Infrastructure Facilities at Naya Raipur
Roads
Six-lane expressways provide easy access to the city. At present, access is
through NH-43 at the south- eastern boundary and NH-6 at the northern
boundary of Naya Raipur. Nearly 75.2 km of 4 lane/six lane roads have
already been constructed. 61 km road network is under construction.
Railway
Naya Raipur is also well connected by rail. The Raipur railway station, the
biggest junction in the state, is 20 kilometres away and the new railway station
at Mandir Hassaud is just 2 kilometres away.
Airport
The airport Swami Vivekananda Airport, formerly known as Mana Airport, lies
5-7 kilometers and separates the new city from Raipur. The city is linked by
regular flights with New Delhi, Mumbai, Kolkata, Bhubaneshwar, Nagpur,
Bhopal, Indore, Ahmedabad & Hyderabad.
Power Supply
The power requirement of Naya Raipur is to be met in three phases. The city
is having an underground power distribution system along with SCADA
(Supervisory Control and Data Acquisition) system to have online monitoring
and control of power supply. Non-conventional and alternative energy
resources are being used to the maximum. Street lighting is planed using
latest technology with network control and LEDs. Solar power will be used
widely in administrative buildings, street lighting and traffic signals.
Water Supply
The initial requirement for water is being met by constructing an anicut on the
Mahanadi river near the village Tila, 23 km. from Naya Raipur. The city water
supply system in Naya Raipur is one of the few in India to work on the Public
Private Partnership model. It shall be a 24X7 water supply with hydro
pneumatic pumping network.
Drainage
Drainage along roads is to be provided without disturbing the major natural
drainage channels. The solid waste management system based on the PPP
model will ensure proper segregation of a waste at source; separate disposal
of hazardous or bio-medical waste; and intensive tree plantation on disposal
areas.
Sanitation & Waste
Management
Naya Raipur will be a zero discharge city having decentralised sewage
treatment for better efficiency.
Telecommunication
The communication system is planned for both wired and wireless services for
voice, data and Value Added Services (VAS). It is proposed to have an
Overlay Area Network (OAN) in the city having 4 loops to cover the total area
with optical fibre connectivity with redundancy. This will provide a backbone
for the modern communication and data transmission within the city of Naya
Raipur. Besides, backbone infrastructures such as ducts are to be provided
for the city level telecom network for the wired broadband and Value Added
Services. It is also proposed to develop the passive infrastructure in the entire
city for the wireless services which may cater for GSM/CDMA and other
modern services such as 3G/WIMAX etc.
Area Statement
Department of Electronics and Information Technology (DEIT), Ministry of Communication and IT,
Government of India issued notification on Electronics Manufacturing Clusters (EMC) Scheme to
provide world class infrastructure for attracting investment in the sector of Electronic Systems Design
and Manufacturing. In order to avail the benefits under the EMC Scheme, CSIDC appointed
Chhattisgarh Industrial and Technical Consultancy Centre (CITCON) for preparation of Preliminary
Detailed Project Report (PDPR) for development of EMC at Naya Raipur. The area statement set out
in the PDPR is set out in exhibit below.
Exhibit 9: Area Statement of the Proposed EMC at Naya Raipur
S. No
Particulars Area (Hectares) Percentage of total Area (%)
Processing Area
1 Total area for Industrial Plots 10.67 37.67%
2 Flatted Factories for industries like tool room, design house, testing & certification facilities etc.
1.78 6.28%
3 Local shopping centre 0.25 0.9%
4 Ware house 0.47 1.68%
5 Other Amenities – PHC, Police Post, Bank, Canteen etc.
0.25 0.90%
6 Road Area 7.11 25.12%
7 Government Support Office & Administrative Block
0.25 0.90%
8 Water Treatment Plant, Over Head Tank and Fire Fighting Station
0.33 1.15%
9 Sewage Treatment Plant (STP) 0.33 1.15%
10 Power Sub Station 0.38 1.33%
11 Power back-up comprising switch room & DG Shed
0.16 0.57%
12 Welfare Services Complex – hostel & mess and Restaurant
0.26 0.92%
13 Recreation facility, playground and club house
0.26 0.92%
14 Support Services Block – Centre of Excellence, R&D facilities, Incubation and consultancy services centre, auditorium, video conferencing hall, cloud computing etc.
1.38 4.89%
Non Processing Area
15 Government and regulatory support services – Office of Development Commissioner, taxation departments, etc.
0.25 0.90%
16 Solid Waste Handling Areas 0.33 1.15%
17 Parking Bay 0.81 2.87%
18 Green Belt + Garden 3.03 10.71%
19 Public amenities – toilet etc 0.003 0.01%
20 Entrance plaza comprising security post etc.
0.002 0.01%
Total 28.32 100%
Source: PDPR prepared by CITCON
Of the total saleable area of 13.43 hectare (1-6 above), total industrial plots constitute around 10.67
hectares which have been divided into 47 plots of different sizes.
Project Cost Estimates
In the PDPR report prepared by CITCON, total cost estimates for development of the Project is
estimated to be INR 105.2 Crore. The project cost of INR 105.23 Crore is envisaged to be funded by
way of grant-in-aid from DeitY, MoC&IT, GoI to an extent of INR 50 Crore while balance INR 55.23
Crore will be funded by either the Government of Chhattisgarh or the Special Purpose Vehicle (SPV)
formed for development of the project.
Probable Project Structuring
The project is envisaged to be developed under the EMC Scheme set out by DeitY, Ministry of
Communication & Information Technology, Government of India. The salient features EMC
Scheme for implementation of the project are set out below.
► Proposed EMCs may use Information Technology Investment Regions (ITIRs) infrastructure,
wherever available
► Implementation of scheme will be through a Special Purpose Vehicle (SPV) which will carry
out the business of developing, operating and maintaining the infrastructure, amenities and
other common facilities created in EMCs
► The guidelines for the institutionalization of SPV set out in the Government of India
notification dated January 30, 2014 are as set out below
► The constituent units including industry associations, FIs, Banks, Academic / R&D institutions,
Government Agencies and the Chief Promoter and other investors may form the SPV.
► At least 7 of the EMC units should be on the Board of Directors of the SPV
► Wherever the SPV is with participation of Government / Government Agency (State / Local),
there shall be atleast one representative of the concerned Government or its agency on the
board of directors of the SPV and any change in the equity structure shall be with the prior
approval of the relevant Government
► Any changes in the equity structure of the SPV, in spite of whether Government or its agency
participates as equity partner in the SPV, shall have prior approval of Department of
Electronics and Information Technology, Ministry of Communication and Information
Technology, Government of India
► The EMC units must hold 51% of the share capital of the SPV with no single unit owning more
than 25% of the share capital. This is requirement is to be fulfilled either at the time of
application for assistance or within a specified time period
Based on the guidelines set out the EMC Scheme, the structuring for the proposed EMC at Naya
Raipur is as set out below.
Exhibit 10: Project Structure for the Proposed Project
As demonstrated in the figure above, CSIDC will be the Chief Promoter, forming a SPV with at least 6
EMC units and other investors, wherein CSIDC along with 6 other EMC units will have to hold at least
51% of the total shareholding of the SPV and also none of the individual unit can hold more than 25%.
Incentives being offered by state government
Chhattisgarh government is offering a number of incentives as per its Electronics and
IT/ITeS Policy 2014-19:
► 100% Entry Tax/ CST reimbursement for 10 years
► 75% Interest Subsidy for 8 years; maximum limit of INR 110 lakhs per annum
► 50% Fixed Capital Investment Subsidy with maximum limit of INR 150 Lakh
► 12 years of Electricity Duty Exemption
► 80% rebate on land premium
► 100% exemption on stamp duty as well as 100% exemption on sale to another IT unit
► Subsidy in bandwidth utilization
► Concession on built-up space lease/rental
► Subsidy on Quality certification and technical patent
► Industrial award scheme
Way Forward
CSIDC has issued an EOI on March 4, 2015 for selection of partners for SPV that will undertake
development, operation and management of Electronic Manufacturing Cluster. Further, members of
SPV will set up their unit in the proposed cluster.
Interested organizations/ consortiums are requested to submit EOI providing following details at
CSIDC office on or before April 20, 2015.
► Details of the company / each member of the consortium
► Audited annual accounts of the company /all the consortium members for the 3 years.
► Details of the technical expertise and operational experience in ESDM sector giving details for
each project - the year of establishment, cost of the project etc.