Weekly News Updates-India May 31 to Jun 6

India's GDP increased by 6.1%; WhatsApp bans more than 70 lakh accounts in India; MeitY launches the ERSO pilot project; Samsung may lose PLI benefits; Modi's chip- making plan suffers setback; Tatas commit more than Rs 7,600 crore to the electronics industry; Foxconn to produce iPhones in Bengaluru by April 2024; Manufacturing PMI hits 31-month high; Decrease in foreign investments in India's startup ecosystem

India’s GDP increased by 6.1% in the final quarter of 2022–2023

India’s economy saw significant growth with a GDP growth rate of 6.1% in the January–March 2022–2023 quarter. This increase resulted in an annual growth rate of 7.2%, which was principally driven by improved performance in the agriculture, manufacturing, mining, and construction sectors. The Indian economy reached $3.3 trillion as a result of substantial growth, which also paves the way for it to accomplish the ambitious $5 trillion goal in the future years.

According to estimates, the economy’s Gross Value Added (GVA) increased by 7% in 2022–2023 as opposed to 8.8% in 2021–22, with manufacturing’s GVA growth declining to just 1.3% from 11.1% in 2017 despite a 4.5% recovery in the fourth quarter following six months of contraction.

India’s GDP expanded 6.1% in 2022-23’s last quarter – The Hindu

WhatsApp bans more than 70 lakh accounts in India

Meta-owned WhatsApp is the most used communication platform app across the world. According to earlier reports, WhatsApp has more than 2 billion monthly active users. In April 2023, the app banned more than 70 lakh accounts in India. This is the highest number of accounts that WhatsApp has ever banned in India in a single month.

Accounts that violate WhatsApp’s terms of service—which prohibit spam, false information, and hate speech—are banned. Additionally, the company bans accounts that are utilized in fraud or other illegal activities.

WhatsApp bans over 70 lakh accounts in India – Telangana Today

MeitY launches the ERSO pilot project to make India a world leader in electronics repair

A pilot project for Electronics Repair Services Outsourcing (ERSO) has been started by the Ministry of Electronics and Information Technology (Meity). The project falls in line with the overall vision of PM Modi to make India a global electronics powerhouse. The ministry anticipates a revenue potential of USD 20 billion over the following five years with the start of the program.

To implement the pilot program, the ministry is collaborating with the Environment Ministry, Director General of Foreign Trade, and Central Board of Indirect Taxes and Customs (CBIC). It is anticipated that over the next five years, India’s ERSO industry is likely to fetch India up to USD 20 billion in revenue and also generate millions of jobs.

MeitY launches ERSO pilot project to make India global electronics repair powerhouse, ET Government (indiatimes.com)

Samsung may lose PLI benefits for the first year on invoicing issues

Electronics giant Samsung may miss the bus even as India plans to offer sops as part of its ambitious Production Linked Incentives (PLI) program. According to a report in the Economic Times, there may be “discrepancies in invoicing.” The report also said that Samsung representatives are speaking with the authorities about making reparations.

Samsung claimed to have received incentives totaling Rs 900 crore in 2021 because it had increased sales by Rs 15,000 crore. However, the corporation had to create devices at a cost of almost Rs 15,000 crore in order to establish a claim for it. Due to “some discrepancies in the company’s invoices,” the report noted, the company was not given the sops.

Samsung may lose PLI sops for first year on invoicing issues | Deccan Herald

Modi’s chip making plan suffers setback as firms struggle to find tech partners

Due to the lack of a technological partner, major companies, including a joint venture between Foxconn and Apple, who submitted a bid for India’s $10 billion semiconductor incentives are struggling, which is a big setback for Prime Minister Narendra Modi’s chip-making goals.

A $3 billion semiconductor facility by chip consortium ISMC that counted Israeli chipmaker Tower as a tech partner has been put on hold due to the company’s ongoing takeover by the proposal. Due to a standoff in their negotiations to get on board European chipmaker STMicroelectronics (STMPA.PA) as a partner, a second massive $19.5 billion proposal to produce chips domestically by a joint venture between India’s Vedanta and Taiwan’s Foxconn is also moving slowly.

The country anticipates that its semiconductor market would be worth $63 billion by 2026. Three applications to establish facilities under the incentive program were received by India last year.  They came from IGSS Ventures in Singapore, the Vedanta-Foxconn JV, and the international consortium ISMC, which counts Tower Semiconductor (TSEM.TA) as a technology partner.

Modi’s chip making plan flounders as firms struggle to find tech partners | Reuters

Tatas commit more than Rs 7,600 crore to the electronics industry

According to reports, the Tata Group has secured funding for Tata Electronics’ greenfield electronic component and contract manufacturing operations. The report states that it has acquired around Rs 7,600 crore in funding through a combination of capital infusion by the parent and secured loans.

According to submissions to the Registrar of Companies (RoC), Tata Electronics received a capital infusion from its parent company Tata Sons for about Rs 608 crore in 2022–23.

The total capital infusion over the last three years is currently Rs 1,820, making this the greatest capital infusion in a single financial year. The report also added that the company has a Rs 2,000 crore approved capital and has so far raised Rs 5,799 crore in secured loans, according to documents.

Tatas line up over Rs 7,600 crore to fund electronics business, ET Retail (indiatimes.com)

Foxconn to produce iPhones in Bengaluru by April 2024

According to Karnataka Large and Medium Industries Minister M B Patil, tech giant Apple’s contract manufacturer Foxconn intends to begin producing iPhone units at its proposed Devanahalli plant nearby by April 2024. The state will provide the company with the necessary land by July 1 of this year.

He made this statement following a meeting with the representatives of the company who paid him a courtesy visit.

According to an official statement. with this, the new administration has accelerated the development of the Rs 13,600 crore project, which is anticipated to generate 50,000 jobs.

Taiwan-based Foxconn to start manufacturing iPhones in Bengaluru by April 2024 – India Today

Manufacturing PMI hits 31-month high in May

The S&P Global India Manufacturing Purchasing Managers’ Index (PMI) soared to a 31-month high of 58.7 in May as factory orders increased at the quickest rate due to increased demand for Indian goods both domestically and abroad as well as an improvement in operational conditions throughout the month.

The May PMI comes one day after information revealed that India’s gross domestic product (GDP) increased by 6.1% in the January-March 2023 quarter, raising the growth projection for the entire 2022–2023 year to 7.2%. In Q4 FY2023, the manufacturing sector experienced a 4.5% year-over-year rise.

Manufacturing PMI hits 31-month high in May, riding demand surge | Business News,The Indian Express

Foreign investments in India’s startup ecosystem have decreased by 72% in 2023 so far

Foreign investments into the Indian startup ecosystem have fallen by 72% in 2023 so far, even as the environment for these businesses has become challenging amid rising interest rates and global economic conditions.

According to statistics from the market intelligence platform Tracxn, the investment by Tiger Global and Accel has decreased by 97% in 2023 thus far compared to the same period in the previous year. Sequoia has decreased by 95%, Y Combinator by 87%, and SoftBank by 80%, it added.

$26 billion of the $26.8 billion raised by Indian startups in 2022 came from international investors.

Foreign investment in startups in India has decreased 72% so far this year to $4.58 billion. In the same time period the previous year, the companies had raised $16.2 billion.

Foreign Investments Into Indian Startup Ecosystem Fall by 72% In 2023 So Far: Report (thewire.in)