#1INDIA-JAPAN TRADE & ECONOMIC RELATIONS WITH FOCUS ON ELECTRONICS FICCI OPPORTUNITIES IN INDIA 6th INDIA-JAPAN JOINT WORKING GROUP MEETING 25 September 2018, Tokyo, Japan Mr Manish Sharma Co-Chair- FICCI Electronics & White Goods Manufacturing Committee & President and CEO Panasonic India Private Limited#2ABOUT FICCI • Established in 1927, FICCI is the largest and oldest apex business organization in India. • • . • A non-government, not-for-profit organization, FICCI is the voice of India's business and industry. Its history is closely interwoven with India's struggle for independence Spread Across 17 Indian States 9 International offices FICCI provides a platform for networking and consensus building within and across sectors and is the first port of call for Indian industry, policy makers and the international business community. FICCI has about 63 sectoral committees spanning across various sectors FICCI Industry's Voice for Policy Change ISO 9001: 2008 Certified Federation of Indian Chambers of Commerce and Industry#3INDIA: GROWTH OUTLOOK India's GDP Growth Projections (in %) by Multilateral Organizations GDP Growth (in %) GDP Growth (in %) FICCI 9.0 8.2 8.0 7.4 7.1 6.7 7.0 6.4 6.0 5.5 5.0 Q2 FY Q3 FY 18 18 Q4 FY 18 Q1 FY19 GDP Growth 6.3 7.0 7.7 8.2 4.0 3.0 2.0 1.0 2017 2018 2019 0.0 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 Asian Development Bank 6.7 7.3 7.6 (July 2018) International Monetary Fund 6.7 7.3 7.5 8.0 6.7 6.8 7.1 6.7 6.0 4.0 2.0 0.7 0.0 Brazil China India -2.0 Russia -0.2 Thailand Indonesia -4.0 2016 2017 -6.0 (July 2018) 5.0 5.1 World Bank 3.7 3.2 6.7 7.3 7.5 (June 2018) 1.8 Organisation for Economic Co-operation and 6.5 7.4 7.5 Development (May 2018)#4INDIA: GROWTH OF KEY SECTORS 8.0 7.0 6.0 5.0 4.8 4.0 3.0 2.0 Manufacturing Growth Rate (%) 4.9 4.6 4.4 3.8 3.6 2.8 3.7 6.7 Growth of Manufacture of computer, electronic and optical products (%) FICCI 44.0 50.0 40.0 31.2 30.8 30.1 30.0 70 7.0 20.0 14.5 10.0 0.0 2012-13% 2013-14 2014-15 2015-16 2016-17 17.2 2.1 5.1 16.0 Growth of Consumer durables Industry (%) 2017-18 Apr-18 May-18 Jun-18 Jul-18 14.4 13.4 14.0 1.0 12.0 0.0 10.0 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 Apr-18 May-18 Jun-18 Jul-18 8.0 6.0 5.6 4.0 4.9 4.0 3.4 2.9 Source: Index of Industrial Production (Base 2011-12) 3.9 2.0 0.0 2012-13 2013-14 2014-15 6.4 2015-16 2016-17 2017-18 0.8 Apr-18 May-18 Jun-18 Jul-18#5GROWTH IN FOREIGN DIRECT INVESTMENT Unprecedented growth in Foreign Direct Investments since the launch of Make in India. FICCI FDI Inflow (USD Billion) FDI Equity Inflow (USD 186.9 160 140 120 100 83.1 Billion) 135.7 200 180 160 140 120.8 120 100 80 80 80 60 60 40 40 20 20 0 0 July 2011 Sept 2014 - Oct 2014 Dec 2017 July 2011 Sept 2014 Oct 2014 Dec 2017 - FDI has shown an extremely positive trend since the launch of Make in India Initiative with growth of 55% on FDI inflow and 63% on FDI Equity Inflows since the launch of the initiative over the corresponding period previous to it. 3#6KEY INITIATIVES OF GOVERNMENT OF INDIA Source: Government of India Key Initiatives كر New Processes New Sectors Ease of Doing Business GST Major FDI reforms and inflows New Approach Make in India Digital India Skill India New Infrastructure New Innovation and R&D Key Infrastructure and Urbanization India - Design & Innovation Start Up India Intellectual Property Rights New Mind-set From red tape to red carpet FICCI#7FORWARD LOOKING POLICY IN ELECTRONICS MSIPS TATOTT MSIPS 134 proposals approved as on May 2018 25 have applications received from Japanese companies for benefits under MSIPS Electronic Manufacture Cluster Scheme 20 Greenfield EMCs and 3 Common Facility Centers (CFC) have been accorded final approval in 15 states throughout the country. National Policy on Electronics, 2012 Policy devoted to growing manufacturing in the electronics sector, which is undergoing revision MAKE IN INGIR ZERO DEFECT ZERO EFFECT मानक: पथप्रदशंक: Bureau of Indian Standards Compulsory Safety Standards Mandates Indian Safety Standards for 30 Electronic product categories Zero Defect Zero Effect To manufacture goods in the country with "zero defects" and to ensure that the goods have "zero effect" on the environment Electronics Development Fund (EDF) 22 Daughter Funds have been selected for investment through EDF. 23 Cumulative commitment is Rs 1227 crore Total targeted corpus is around Rs 10,900 crore FICCI#8OPPORTUNITIES Big Ticket Opportunities in ELECTRONICS in INDIA FICCI B CAR SERVICE Consumer Electronic Mobile Phones LED Lighting SET TOP BOX Automotive Electronics Components US$ 22 Bn Market Growing @13% pa. From 14 mn to 20 Mn by 2020. 300 Mn Units Market; Growing rapidly-400 Mn by 2020 Share has increased from 13% to 63% in last 6 years. Grew from US$ 200 Mn to $1500 Mn in 2018 Annual Demand 60 Mn pcs; Imports 24 Mn Pcs- Replacement Demand is 10%. - 18Mn 2Wh and 3 Mn 4Wh, Growing steadily at 7-8% per annum PCB's Demand growing from US$ 2.3 Bn in 2017 to ~10Bn by 2022#9SHARE OF ELECTRONICS 6 Electronic Components, 15.1 5 Strategic Electronics, 6.1 7 LED Products, 2.5 1 Consumer electronics, 19.0 FICCI 2 Industrial Electronics, 17.8 Electronics market of India is one of the largest in the world Anticipated to reach US $ 400 bn in 2023- 24 from US$ 69.6 billion in 2012 (Meity Annual Report 2017-18) • Production of electronics sector in India has increased at CAGR of 19.1% in the last 5 years. 4 Mobile Phones, 34.1 3 Computer Hardware, Source: Ministry of Electronics Annual Report 2017-18 5.5#10INDIA-JAPAN TRADE & ECONOMIC RELATIONS Bilateral Trade FDI Inflows from Japan Economic relations between India and Japan have vast potential for growth India's total Trade in 2017-18 was US $ 769.1 billion • • Exports were US $ 303.5 billion Imports were US $ 465.6 billion Japan is India's 3rd largest investor FDI Equity inflows from Japan to India were US $ 1.6 bn in April-March 2017-18 Japan ranks 13th amongst India's top trading partner. Bilateral trade between India and Japan has increased from US$ 4 billion in 1999-2000 to US$ 15.70 billion during 2017-18, at CAGR of 8.4% Cumulative FDI equity inflows from Japan to India from April 2000 to June 2018 are US $ 28.1 billion • Approx 7.2% of total FDI Inflows Top sectors attracting investments from Japan : Automotive Drugs and pharmaceuticals Services Metallurgical industries Telecom FICCI#11BILATERAL TRADE BETWEEN INDIA AND JAPAN India's top 5 Exports to Japan (US $ million) India's top 5 Imports from Japan (US $ million S.No. HSCode Commodity 2016-17 2017-18 1 27 MINERAL FUELS, MINERAL OILS AND 564.1 %Growt h 866.14 53.54 S.No. HSCode 1 84 PRODUCTS OF THEIR DISTILLATION; BITUMINOUS SUBSTANCES; MINERAL WAXES. 2 3 FISH AND CRUSTACEANS, MOLLUSCS AND 383.19 443.85 15.83 2 85 OTHER AQUATIC INVERTABRATES. 34 29 ORGANIC CHEMICALS 413.56 84 NUCLEAR REACTORS, BOILERS, 267.53 408.83 -1.14 294.02 9.9 MACHINERY AND MECHANICAL APPLIANCES; PARTS THEREOF. 5 71 NATURAL OR CULTURED 310.37 278.09 -10.4 PEARLS,PRECIOUS OR SEMIPRECIOUS 3 12 Commodity NUCLEAR REACTORS, BOILERS, MACHINERY AND MECHANICAL APPLIANCES; PARTS THEREOF. 2016-17 2017-18 % Growth 2,784.12 2,669.19 -4.13 ELECTRICAL MACHINERY AND EQUIPMENT AND PARTS THEREOF; SOUND RECORDERS AND REPRODUCERS, TELEVISION IMAGE AND SOUND RECORDERS AND REPRODUCERS,AND PARTS. 1,141.44 1,335.74 17.02 STONES,PRE.METALS,CLAD WITH PRE.METAL AND ARTCLS THEREOF;IMIT.JEWLRY;COIN. 12 85 ELECTRICAL MACHINERY 72 IRON AND STEEL 930.55 1,169.67 25.7 697.68 830.38 19.02 4 39 PLASTIC AND ARTICLES THEREOF. 5 90 AND 99.09 99.9 0.83 OPTICAL, PHOTOGRAPHIC CINEMATOGRAPHIC MEASURING, CHECKING PRECISION, MEDICAL OR SURGICAL INST. AND APPARATUS PARTS AND ACCESSORIES THEREOF; 639.6 700.88 9.58 EQUIPMENT AND PARTS THEREOF; SOUND RECORDERS AND REPRODUCERS, TELEVISION IMAGE AND SOUND RECORDERS AND REPRODUCERS, AND PARTS. India's exports to Japan were US $ 4.7 billion India's major exports to Japan have been primary products- very little exports of electrical & electronic items Imports by India from Japan for 2017-18 are US$ 10.9 billion- Electrical & electronics items form major imports from Japan FICCI#12- INDIA-JAPAN Partnership – Salient Features FICCI Japan offers cutting edge technology option for Indian Market with potential for Mutual benefit - optimal technology solutions for the growing demand of India in ESDM sector. Indian & Japanese industry largely keen on long term strong business relationships, committed and mutually beneficial partnerships Forge partnerships - - SME's need to take small steps and grow to a comprehensive JV. Manufacturing in India is the right strategy with gradual transfer of technology to the JV. Ensure maximum policy benefits which needs time. Focus on few collaborative domains - like Auto-electronics, Medical electronics, LED, Components, Consumer Durables with high market potential#13JAPANESE COMPANIES PRESENT IN INDIA IN ELECTRONICS • Panasonic India • Daikin Air conditioning India Pvt. Ltd. • • Nippon Audiotronix Canon Fujitsu India Ltd Alpine Electronics Asia Pvt. Ltd Panasonic DAIKIN AIR CONDITIONING NIPPON Canon • FUJITSU ////ALPINE. • Sharp India Ltd. • Sony India Pvt. Ltd Hitachi Home & Life Solutions SHARP SONY Akasaka Electronics Ltd HITACHI ONKYO • Onkyo Sight and Sound India Pvt. Ltd. FICCI#14JAPANESE INDUSTRIAL TOWNSHIPS Special Incentives to Japanese Industrial Townships (JIT) Proposed By Some States: Source: http://dipp.nic.in/japan-plus/japanese-industrial-townships Power Roads Indicator Rajasthan Maharashtra Gujarat Yes Yes Yes Yes Yes ཚེ།ཚེ FICCI Madhya Pradesh Haryana Uttar Pradesh Yes Yes Yes Yes Yes Yes Yes Yes Water Yes Yes Yes Yes (100% Exemption of CST Yes (0.25% instead of 2%) Yes (100% of CST Abatement) No reimbursement of VAT and CST for 10 years) No No Exemption of Electricity Duty Yes (50 % for 7 years) Yes (100%) Yes (For 5 years) Yes (For 10 years) Yes (Special Package of Incentives is available for mega projects) Yes (For 10 years) Exemption of Stamp Duty Yes (50%) Yes (100% within investment period for acquiring land) Yes N.A. Yes Yes Exemption of Entry Tax Yes (Investment more than 750 crores) N.A. Yes Yes (For 7 years) Yes Yes (Only on Iron and Steel to be used as raw material) Exemption of Land Yes Yes (50% for seven years) N.A. N.A. Yes (upto 50%) Yes Acquisition Tax Single Window Yes Yes N.A. Yes Yes Yes Clearance#15JAPANESE INDUSTRIAL TOWNSHIPS NEEMRANA A collaboration between JETRO and the Government of Rajasthan 1,100 acres of land hosting companies such as Toyota, Daikin, Hitachi Uninterrupted power and water supplies 园 FICCI Streamlined license and approval process that bypasses local officials Created about 10,000 factory jobs mainly in Automotive sector Source: https://www.ndtv.com/india-news/japan-inc-s-huge-base-near-delhi-1-000- acres-karaoke-lounges-factories-1723244#16INDIA-JAPAN | MAJOR PROJECTS Chennai- Bengaluru Indusrial Corridor (CBIC) m Delhi-Mumbai Industrial Corridor Project FICCI Mumbai-Ahmedabad high- speed rail corridor#17CASE STUDY IN DIGITAL TALENT- Under Make In India Vendor to Strategic Partner TAIWAN COMPONENT COMPANIES (facilitating Design Capabilities) INDIAN BRANDS COMPONENT SOURCING DESIGN MANUFACTU RING SALES & ISTRIBUTION Class Design Principle: • Target in senior design engineer or manager. From theory to hand-on lab. • Cover all key component areas and their integrations. FICCI#18CASE STUDY IN DIGITAL TALENT- Under Make In India 2016 CLOSING CEREMONY-TAIWAN HANDSET HARDWARE DESIGN DEVELOPMENT PROGRAM CLOSING CEREMONY THANK YOU&LOOK FORWARD TO SEEING YOU NEXT YEAR 9ee 2017 CLOSING CEREMONY-TAIWAN ORGANIZERS NIELIT MEDIATED ICA NIELIT India Mety India MoEA Tawan MediaTek Inc THI Indian Celular Association SUPPORTERS Anritsu AIROHN GOODIX ILITEK KEYSIGHT MOINT Rat PRIMAX 11 ecosystem companies work together 6 weeks in Taiwan. 49 students from 22 Indian companies. 19 ecosystem companies work together Section 1: One day remote training per week for 6 weeks. (Total 87 candidates from 42 companies) Section 2 : 3 weeks in Taiwan. (Total 39 candidates from 27 companies) FICCI#19Vendor Development Program for Indian industry with the support of Japanese industry Final selection of the vendors based on capability level achieved Drawing the schedule for Vendor Partnership/Interaction) To be finalized by FICCI, MEITY) based on the criteria laid out under the framework Identification of Indian companies Vendor Partnership/Interaction Discussing and finalsing the framework of cooperation for Vendor Partnership/Interaction with the Japanese side FICCI-MEITY-JETRO (Implementing Agencies) Identification of the Parts/Components to be supplied by Indian Manufacturers to the Japanese OEMS Identification of the Japanese OEMs/Anchor firms which would participate • To be suggested by JETRO/JEITA) FICCI#20WAY FORWARD FICCI Developing component base in India with the support of Japanese industry Training & Skill development for design & manufacturing (as shared in the successful case study model with Taiwan industry) Industry 4.0, Digital technologies - Vast array of opportunities in these technologies for Japanese industry Clusters, Townships & Industrial Parks - Already work underway in some townships and more such townships could be developed#21THANK YOU FICCI