India-Japan JWG Industry-Industry Session: Presentation on ... · 2 Indian ESDM Industry Overview 3...
Transcript of India-Japan JWG Industry-Industry Session: Presentation on ... · 2 Indian ESDM Industry Overview 3...
India-Japan JWG Industry-Industry Session: Presentation on Industry Scenario in India
November 13, 2013
2
1 India Story
2 Indian ESDM Industry Overview
3 Government Initiatives
4
Talent Availability and HR Initiatives
5 India Specific Product Innovation
6 Opportunities in India
Contents
3
10th largest economy in the world, 3rd largest by 2030.
World's third-largest economy in
purchasing power terms.
Dominated by young people with 60% of the 1.2 Bn Population between 15-54
age group
India has the 2nd largest pool of engineers and scientists in the world
In the next three years, up to 25% of the world's new workers will be Indian.
India's GDP per capita will quadruple from 2007 to 2020, according to
Goldman Sachs
220 out of Fortune 500 companies outsource to India
Half the world’s outsourced IT services come from India
5
“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..”
John 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
“"We are in India for the long run, and getting the production right is the key.”
Mr Toru Hasegawa , Corporate Vice President for Africa, The Middle East And India, Nissan
India Story – Leaders Speak
6
0.00
20.00
40.00
60.00
80.00
100.00
2010 2011 2012 2013 2014 2015
51.22 55.45 57.58 63.53 70.48
78.74
7.79 9.15 10.72
12.08
13.68
15.46
Rev
en
ue
s ($
Bill
ion
)
Indian ESDM Industry: Revenue Forecasts Split by Product and Services (2010-2015)
Product Industry Size Services Industry Size
59.01
64.61
68.31
75.61
84.16
94.20
2012 TM Revenues: $44.81 billion
Mobile Devices 39.0%
Telecommunications
8.1% Consumer Electronics
15.9%
Automotive 6.8%
IT / OA 17.9%
Industrial 6.9%
Others 5.4%
Very High demand for 3G and Smart Phones drive Mobile Devices growth
Tablets, Notebooks and Memory Cards position IT/OA as the second biggest contributor
Rapid growth in FPD TV market, Digitization drive propels STBs to make Consumer electronics the 3rd biggest revenue contributor
Indian Electronic System Design and Manufacturing (ESDM) - Industry Overview
7
Mobile Phones FPD TV Notebooks Desktops Digital Camera
Inverter & UPS Pen Drives & Flash Cards EMS 4W LCD Monitor BTS GSM & CDMA
Servers Power Supplies CFL STB Printers/MFD
Routers & Switches Car Radio Instrument Clusters Energy Meters Smart Cards
Product Revenue % of
Total
Mobile Phones 38.6%
FPD TV 7.9%
Notebooks 5.5%
Desktops 4.4%
Digital Camera 2.7%
Inverter, UPS 2.7%
Pendrives, Flash Storage
2.5%
EMS 4W 2.3%
LCD Monitor 2.0%
BTS 1.7%
Total of Top 10 Products
70.3%
Product Revenue
% of Total
Servers 1.7%
Power Supplies 1.3%
CFL 1.2%
Set Top Box 1.3%
Printers, MFD 1.1%
Routers, Switches 1.1%
Car Radio 1.0%
Instrument Clusters 0.7%
Energy Meters 0.7%
Smart Cards 0.5%
Total of Top 20 Products
80.7%
Top 20 Products Account for 81% of
Overall TM in 2012
Top 20 Products that drive India’s Demand
National Optical Fiber Network
Provide broadband connectivity to panchayats so that
banking and health services can be accessed online
US$ 4
bn
US$ 1.2
bn
US$ 4
bn
National Knowledge Network
Infrastructure project to connect educational and research
institutes
National e-Governance Plan
Countrywide infrastructure reaching down to the remotest
of villages; bringing public services closer to home
US$ 2
bn
Low cost Tablets
Low Cost Tablet for Education- Aakaash;
several other State Governments coming up with denamd
for laptop / tablets
US$ 0.2
bn
LED products
Distribution of free LED lights to all BPL families ; Excise
duty reduction on LED lamps and LEDs
Major Government Procurement Projects
32.5
99.5
400
69.6
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
450.0
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
Dem
an
d &
Pro
du
ctio
n
Year
CAGR – 37%
CAGR – 15%
Production is characterized by low value addition (5-10%)
Values in US$ Billions
Source: Report of sub-committee of task force set up by DEITY, Government of India. Report by Ernst & Young
India | Electronics Demand and Production - 2020
Requirement of 200 million Set Top Box in
next 5 years
LED
US$ 35
bn
Telecom
Equipment
US$ 34 bn
Laptop/Computers
US$ 24 bn
Automotive
Electronics :
US$ 4.5 bn
Semiconductor
design
US$ 55 bn
Medical
Electronics
US$ 5 bn
Major ESDM Products – Demand in 2020
11
Electronics Manufacturing Cluster Scheme (EMC)
Modified Special Package Incentive Scheme (M-SIPS)
Electronics Development Fund (EDF)
Setting up of 2 Semi-conductor Wafer Fabs in India
Preferential market Access (Value Added Manufacturing Access)
Mandating Safety Standards
Human Resource Development
Government Initiatives
12
Limited Battery for Radio 5 Persons on a
Scooter
TATA NANO: World’s Cheapest
Car
Base Model Price: $2000
TITAN EDGE: World’s Slimmest
Watch Launched in 2002
Crank Radio by Philips India: Works
on mechanical power through the movement of a rotary
arm
Low Cost Ultrasound by GE India Launched in 2011
A Few Innovative Leadership Products from India
13
7 Inches Akaash 3 Tablet, Price = $50
UPS, Inverters and Power Stabilizers Smart Energy Meters
Tech Made in India ….. For the World
14
2500 annually PhDs in Electronics by 2020
0
100
200
300
400
500
600
2009 2010 2011 2012 2013
Total Engineering Talent Relevant Engineering Talent
11%
Fresh graduate supply in India
Electronics and Telecom Sector Skill Council set up
28 trades proposed to be covered in the skill development plan
Skill Development for 1 million persons
Special Manpower Development Programme- Phase III for VLSI and chip design for 10,000 students
Steady growth planned in the number of persons to be imparted skills to reach around 6.5 lakh persons yearly by 2020
31 ICT and Electronics Academies-Scheme under approval
Talent Availability and HR Initiatives
15
Top 10 Products making 70% of total market
◦ Enormous growth opportunity in Indian Market
◦ Japanese brands enjoy enormous goodwill and brand recall in India
But that does not necessarily translate to market share
• Scope for R&D work in India
◦ Japanese companies have leadership in technology development
◦ Huge comfort level in terms of IP protection
How can significant R&D in India translate to Japanese companies getting a share of Indian market?
Market Realities
16
Energy, Education, Medical Electronics
◦ India looking at driving inclusive growth using electronics as a
meta-resource
◦ Innovative competitively priced products will be necessary to
achieve this goal
Automotive Electronics also offers huge opportunity for Japanese
companies
Collaborative approach in R&D can be utilized to build
products for India also involving local talent eco-system
◦ Why are design-development-manufacturing not being sited in
the markets where consumers are buying products?
“Made in India” ….. For the World – these products will find
huge market acceptance in Latin America, Africa, APAC
Manufacturing costs and new govt. incentives make it very
competitive
Opportunities in India