Weekly News Updates- Jun 12 – June 19

Ashwini Vaishnaw indicates process of drafting the Data Protection law in its advanced stages; Sustain growth in the semiconductor and electronics sectors for the next five years: Secretary; Startups' funding woes cause their pink slip count to drop to 10,000; State governments providing housing assistance at new semiconductor hubs; Minda Corp collaborates with Taiwanese firm to manufacture sun roof for PVs locally; MeitY to talk with industry associations about the draft of a digital competition bill; FAME-3 might be released on budget day with an expected allocation of Rs 10,000 crore; Tata in talks to acquire the majority of Vivo India's stakes

Ashwini Vaishnaw indicates process of drafting the Data Protection law in its advanced stages

Minister for Electronics and IT, Ashwini Vaishnaw, announced on Saturday that the drafting of rules under the Data Protection legislation is in its advanced stages, with industry-wide consultations expected soon. He emphasized that India aims to double electronics production and create additional jobs under the Modi 3.0 government. Vaishnaw assured that the digital regulatory framework’s agenda remains “intact,” with timelines for semiconductor plants by Micron and Tata Group proceeding as planned. The implementation of the Digital Personal Data Protection (DPDP) Act will adhere to a ‘digital-by-design’ principle, fostering a new operational paradigm. The creation of this platform is progressing simultaneously, spearheaded by in-house teams such as the NIC and DIC. Passed by Parliament in August last year, the DPDP Act aims to protect citizens’ privacy and imposes penalties of up to Rs 250 crore on entities for misuse or failure to protect digital data. Vaishnaw, who recently assumed the role of Minister for Electronics and IT, reviewed the progress on data protection rules and expressed satisfaction with the outcomes, though he acknowledged the need for adjustments based on industry and stakeholder feedback. He promised a thorough, consultative process for finalizing the DPDP rules.

Additionally, Vaishnaw highlighted the ministry’s focus on transforming India into a global electronics manufacturing hub. He expressed confidence that a “good and clear picture” of this goal would emerge in the next three to four months. The progress on Micron’s plant, which will produce made-in-India memory chips, is promising, and other plant projects are also advancing well. The minister has engaged with the chief ministers of Assam and Gujarat, who have pledged full support for these initiatives and are actively involved in the ongoing projects. In parallel, manpower training is being prioritized to develop a skilled workforce in chip manufacturing, aligning with India’s vision of building a strong skills base in this sector.

Editor’s Note: Ashwini Vaishnaw, India’s Minister for Electronics and IT, announced that the drafting of rules for the Digital Personal Data Protection (DPDP) Act is in its final stages, with wide-ranging industry consultations expected soon. Emphasizing the government’s commitment to doubling electronics production and creating jobs, Vaishnaw underscored the act’s focus on digital privacy and stringent penalties for data misuse. He assured that the regulatory framework is being developed with a ‘digital-by-design’ approach, aiming to foster a robust operational environment while advancing initiatives like semiconductor manufacturing in collaboration with global firms.

Sustain growth in the semiconductor and electronics sectors for the next five years: Secretary

S. Krishnan, Secretary of the Ministry of Electronics and Information Technology (MeitY), Government of India, emphasized the need to sustain growth in the electronics and semiconductor sectors. He identified the immediate challenge for the next year or so as to ensure that manufacturing projects are completed on schedule and start delivering results. To meet domestic demand and enhance semiconductor exports, the country will require two or three additional fabs. In the electronics sector, the primary goal is to attract more component manufacturers. Another key objective for the next five years is to ensure that the hardware manufacturing projects already underway begin producing devices for both domestic and international markets. In the subsequent discussion, Krishnan detailed the major goals the Ministry aims to achieve in the coming five years.

The significant advancements in India’s semiconductor and electronics design and manufacturing capabilities are among the most notable achievements of the past five years. The semiconductor industry has now firmly established itself in India. There has been substantial growth in electronics manufacturing, resulting in a significant rise in electronics exports from India. In FY24, India’s electronics exports increased to $29.12 billion.


Editor’s Note: S. Krishnan, Secretary of India’s Ministry of Electronics and Information Technology (MeitY), highlighted the government’s strategic focus on sustaining growth in the semiconductor and electronics sectors over the next five years. Emphasizing the completion and operationalization of ongoing manufacturing projects, Krishnan outlined the need for additional fabs to meet domestic demand and bolster semiconductor exports. He underscored the achievements of the past five years, including the establishment of a robust semiconductor industry and substantial growth in electronics manufacturing, which has significantly boosted India’s electronics exports to $29.12 billion in FY24.

Startups’ funding woes cause their pink slip count to drop to 10,000

Indian startups have laid off about 10,000 employees so far in 2024, with funding across stages remaining constrained. Companies are hiring talent cautiously, focusing on improving their bottom lines early in their lifecycle. The first half of 2024 has seen fewer layoffs compared to the last six months of 2023, which saw around 15,000 layoffs, and the first half of 2023, when 21,000 employees were let go, according to data from Longhouse Consulting. Despite the reduction in layoffs, senior HR professionals and industry executives told ET that startups are not yet out of the woods. Over the past six months, venture-funded firms like Swiggy, Ola, Cultfit, Licious, PristynCare, and Byju’s have all fired employees to cut costs.

Additionally, some of the largest consumer internet firms, such as Flipkart and Paytm, have reduced their workforce. ET reported earlier this year that Flipkart was cutting 5-7% of its workforce, amounting to 1,100-1,500 employees, while Paytm has consistently been firing staff as part of restructuring, with at least 1,000 employees let go. Startups are also conducting layoffs more quietly and gradually compared to last year, industry executives said. Anshuman Das, cofounder and chief executive of Longhouse Consulting and talent solutions firm Careernet, noted that about 40-50% of the layoffs this year have been ‘silent layoffs,’ where firms did not make official announcements or made the cuts in smaller batches, often citing reasons such as underperformance. This is a significant increase from about 20% silent layoffs last year.


Editor’s Note: In 2024, Indian startups have contended with funding constraints, resulting in approximately 10,000 job cuts across the sector. Despite a decrease compared to previous periods, such as 15,000 layoffs in the latter half of 2023 and 21,000 in the first half of 2023, challenges persist. Startups like Swiggy, Ola, and Byju’s have been among those reducing their workforce to streamline operations and manage costs amidst ongoing economic uncertainties in the startup ecosystem.

State governments providing housing assistance at new semiconductor hubs

In line with the advancement of semiconductor manufacturing facilities in Assam, Gujarat, and Tamil Nadu, state governments are providing infrastructure support, including worker accommodations, at these emerging manufacturing hubs, reports Economic Times. For the semiconductor fabrication facility at the Dholera Special Investment Region (DSIR) in Gujarat and the Outsourced Semiconductor Assembly and Test (OSAT) facility in Morigaon, Assam, the state governments have allocated land at subsidised rates for large-scale housing projects, hostels, and dormitories for the workforce. Both facilities, to be established by Tata Electronics Private Limited (TEPL), will benefit from these initiatives. An official stated that the Gujarat government is developing a housing project for the Dholera chip fabrication unit, including 1,500 flats for workers and engineers, along with hostels and dormitories for up to 10,000 shop floor workers. Additionally, in Sanand, where the Micron and CG Power units are located, some residential units are already available.

For the chip packaging facility in Morigaon, Assam, the site, formerly housing paper mills, already has some existing housing structures, but specific on-campus housing facilities are being developed to meet the unique needs of a chip factory. In Tamil Nadu, at the Hosur plant where Tata Electronics assembles iPhones, the state government is supporting a housing initiative by providing land at subsidised rates, investing in the housing project, and funding the construction of an access road to the plant. Furthermore, the Tamil Nadu government is building a state-run facility in Sriperumbudur with an 18,000-bed capacity for Taiwanese contract manufacturer Foxconn, scheduled to open in August. The government is also promoting various other industrial housing projects, including one in Shoolagiri, Krishnagiri district, for which tenders are expected to be invited soon to support industrial development in the region.


Editor’s Note: State governments in Assam, Gujarat, and Tamil Nadu are actively supporting semiconductor manufacturing hubs by providing subsidized land for housing projects aimed at accommodating workers. These initiatives are part of efforts to bolster infrastructure around emerging semiconductor facilities, such as those by Tata Electronics and Foxconn, enhancing operational support and economic development in these regions.

Minda Corp collaborates with Taiwanese firm to manufacture sun roof for PVs locally

Auto components maker Minda Corporation announced on Friday that it has entered into a joint venture agreement with Taiwan-based HSIN Chong Machinery Works Co to produce sunroofs for passenger vehicles locally. The 50:50 partnership aims to localize the production of sunroof and closure technology products. Minda Corporation Chairman & Group CEO Ashok Minda stated that this collaboration highlights their commitment to Atmanirbhar Bharat, aiming to provide comprehensive system solutions that encompass product design, development, and manufacturing for passenger vehicles.

HSIN Chong Machinery Works Chairman Roger Hsi expressed enthusiasm about collaborating with Spark Minda to expand their footprint in India’s growing vehicle market. The goal is to develop and manufacture innovative integrated automotive sunroof and closure systems for next-generation vehicles. The partnership is expected to leverage the complementary strengths of both organizations to establish a strong presence in the rapidly expanding Indian market. HSIN Chong Machinery Works operates through 29 sales, technical, and manufacturing facilities worldwide.


Editor’s Note: Minda Corporation and Taiwan’s HSIN Chong Machinery Works Co have formed a 50:50 joint venture to locally manufacture sunroofs for passenger vehicles in India. This collaboration underscores Minda Corporation’s commitment to fostering self-reliance in India’s automotive sector by enhancing local production capabilities. The partnership aims to deliver advanced sunroof and closure technology solutions to meet the evolving demands of the Indian market.

MeitY to talk with industry associations about the draft of a digital competition bill

The Ministry of Electronics and Information Technology (MeitY) held its second meeting on the Digital Competition Bill on June 19, this time with think tanks to discuss the potential impact the regulation may have on the industry. The bill introduces additional obligations for companies meeting specific thresholds such as global turnover and number of business users, aimed at curbing anti-competitive practices of Big Tech. However, the industry argues it may severely impact smaller companies and startups. Convened by IT Secretary S. Krishnan, the meeting included officials from MeitY and the Competition Commission of India (CCI), along with think tanks such as Esya Centre, The Dialogue, CUTS, Chase India, MediaNama, Centre for Competition and Law, and Centre for Digital Future. During the meeting, think tanks highlighted that ex-ante regulation like the Digital Competition Bill could severely impact startups and innovation, stressing the need for more evidence before introducing such regulations and suggesting alternative measures for strengthening CCI’s capacity.

In the coming days, MeitY is expected to meet more industry bodies and company representatives. This was the second meeting with the industry, following a session with industry associations such as the Internet and Mobile Association of India (IAMAI), Federation of Indian Fantasy Sports (FIFS), CCAOI, MakeMyTrip, Digital News Publishers Association (DNPA), Alliance of Digital India Foundation (ADIF), and Indian Newspaper Society (INS). IAMAI raised concerns about the bill’s far-reaching effects on sectors like investments, while ADIF advocated for the bill. MakeMyTrip suggested revisiting the thresholds for designating a company as a Significant Social Digital Enterprise (SSDE) in the draft bill. The industry remains divided over the necessity of the bill, with some companies like Bharat Matrimony, Match Group, Hoichoi, and Sharechat opposing IAMAI’s stance against the bill. This split can be traced back to 2023, when the Committee on Digital Competition Law first invited industry submissions on the need for a separate law to regulate digital markets, leading to criticism of IAMAI’s position by Indian entrepreneurs who felt it reflected the composition of its Big Tech-influenced leadership.


Editor’s Note: The Ministry of Electronics and Information Technology (MeitY) convened its second meeting on the Digital Competition Bill, engaging with think tanks to discuss its potential implications on the industry. The bill proposes stringent regulations targeting Big Tech to curb anti-competitive practices but has raised concerns among smaller companies and startups over its impact. MeitY plans further consultations with industry associations and company representatives to address these concerns and gather feedback before finalizing the draft legislation.

FAME-3 might be released on budget day with an expected allocation of Rs 10,000 crore

The government may introduce the third iteration of the Faster Adoption & Manufacturing of Electric Vehicles (FAME) scheme in the upcoming Budget with an outlay of Rs 10,000 crore to boost the sale of electric vehicles, according to the Economic Times. The FAME-III scheme is expected to support two, three, and four-wheeler electric vehicles. This comes after the budgetary allocation for the FAME scheme was reduced by nearly 44 percent to Rs 2,671 crore for FY25 in the interim budget presented in February 2024. Previously, the Ministry of Heavy Industries was allocated Rs 5,127 crore for fiscal 2023-24, the highest since the Rs 10,000-crore FAME scheme was launched in 2019.

In her Interim Budget 2024 speech, Finance Minister Nirmala Sitharaman stated that as India progresses towards its net-zero emission target by 2070, the government aims to expand and strengthen the EV ecosystem and develop the necessary charging infrastructure. The FAME scheme is a government subsidy initiative under the National Electric Mobility Mission Plan (NEMMP). According to Counterpoint Research, electric vehicle (EV) sales in India are projected to surge by 66 percent this year due to state subsidies and the development of supporting infrastructure, with EVs expected to constitute around 4 percent of the total passenger vehicle market by the end of 2024.


Editor’s Note: The Indian government is poised to unveil FAME-III during the upcoming Budget, allocating Rs 10,000 crore to accelerate the adoption of electric vehicles (EVs). This initiative aims to bolster sales of two, three, and four-wheeler EVs as part of efforts to enhance the country’s EV ecosystem and support its net-zero emissions target by 2070. The move follows a significant reduction in the interim budget allocation earlier this year, underscoring the government’s commitment to promoting sustainable mobility.

Tata in talks to acquire the majority of Vivo India’s stakes

The Tata Group, one of India’s largest conglomerates, is reportedly in advanced discussions to acquire a majority stake in Vivo’s operations in India. This strategic move aims to strengthen Tata’s presence in the highly competitive smartphone market and expand its footprint in the technology sector. Vivo, a leading global smartphone brand, has gained significant market share in India with its range of innovative mobile devices. The potential acquisition would allow Tata Group to leverage Vivo’s established brand presence and extensive distribution network across the country. These discussions highlight Tata’s strategic focus on enhancing its digital and consumer electronics portfolio, capitalizing on the booming smartphone market in India, which continues to experience robust growth and adoption.

If successful, the deal could significantly bolster Tata Group’s capabilities in manufacturing, distribution, and customer service within the smartphone industry. It would align with Tata’s broader vision of becoming a key player in India’s digital transformation and technology-driven economy. The acquisition talks underscore Tata Group’s proactive approach to expanding its business interests and leveraging strategic partnerships to drive growth. As negotiations progress, both parties are expected to assess regulatory approvals and operational synergies to finalize the terms of the deal. Overall, the potential acquisition of Vivo’s majority stake by Tata Group signifies a pivotal move in the Indian smartphone market, potentially reshaping competition dynamics and positioning Tata as a formidable player in the tech industry.


Editor’s Note: Tata Group is reportedly in advanced talks to acquire a majority stake in Vivo’s operations in India, aiming to strengthen its presence in the competitive smartphone market. This strategic move would enable Tata to capitalize on Vivo’s established brand recognition and expansive distribution network across the country. The potential acquisition underscores Tata’s strategic pivot towards expanding its digital and consumer electronics portfolio, signaling significant ambitions in India’s burgeoning technology sector.