Weekly News Updates- March 6 – March 12

Sales of IT hardware may decline; Government to provide over 100 colleges with cutting-edge tools for chip design; Manufacturing of mobile phones surges 21 times; EFTA and India establish a $100 billion free trade agreement; Cabinet approves more than ₹10000 crore to expand India's AI sector; Govt to boost outlay to draw in more global chip manufacturers; Global market to be dominated by Indian SaaS goods by 2028; MediaTek to concentrate on premium smartphones; Modifications to the Space Sector's FDI

Sales of IT hardware may decline as government expenditure is cut

The government will cut back on IT procurement spending in the wake of the upcoming general elections, which will affect sales of laptops, desktops, and other IT hardware in the first half of 2024, industry analysts told ET.
According to statistics from market research firm International statistics Corporation (IDC), sales of IT hardware in the commercial segment are predicted to remain flattish in the first half of the year at levels of roughly 2.9 million units, which was already rather low.

According to IDC, there could be a 24% decrease in this market as compared to the first half of 2022. According to IDC predictions, consumer sales could decline by 17% to 3.4 million units in the second half of 2022 compared to the first half of 2022.


Government to provide over 100 colleges with cutting-edge tools for chip design

The government is reportedly providing electronic design automation (EDA) tools from Siemens EDA, Synopsys, and Cadence to over 100 institutions as part of its endeavor to cultivate talent for the semiconductor industry.

Chip design software company country leaders told ET that training with these tools guarantees students are prepared for the workforce when they graduate.

Siemens and the IT ministry have been collaborating to create an EDA tools grid as a component of the chip startups’ design-linked incentive scheme. Similarly, to address labor shortages and develop talent for the semiconductor sector, Synopsys has worked with IIT Bombay, Indian Institute of Science, and Jadavpur University under the Synopsys Academic & Research Alliances (SARA) project. Cadence’s suite of EDA solutions is also available to 350 engineering universities in India.


Editor’s Note: The government’s initiative to equip over 100 colleges with advanced chip design tools from Siemens EDA, Synopsys, and Cadence aims to bolster talent development for the semiconductor industry. Collaborations between these companies and educational institutions ensure students receive relevant training, addressing labor shortages and enhancing readiness for the workforce upon graduation.

Manufacturing of mobile phones surges 21 times to Rs 4.1 lakh cr in ten years: ICEA

The value of mobile phone manufacture in India has increased 21-fold to Rs 4.1 lakh crore in the last ten years, according to a statement from industry association ICEA. This growth has been attributed to government policy initiatives like PLI, which have attracted international companies to support local production.

97% of India’s demand for mobile phones is currently met locally, while 30% of the country’s total production in the 2024 fiscal year is slated for export, according to the India Cellular and Electronics Association.

As per a manufacturing note, Apple and Samsung have significantly contributed to the increase in mobile phone exports from the nation.

In addition to South American and Middle Eastern markets, the paper stated that India is a major exporter of gadgets to the UK, Netherlands, Austria, and Italy.


Editor’s Note: Over the past decade, the manufacturing value of mobile phones in India has surged by 21 times, reaching Rs 4.1 lakh crore, driven by government policies such as PLI. With 97% of local demand met domestically and 30% of production earmarked for export, India’s mobile phone industry is experiencing substantial growth, with Apple and Samsung notably contributing to increased exports.

EFTA and India establish a $100 billion free trade agreement to encourage investment

A free trade agreement was signed by India and the four members of the European Free Trade Association (EFTA) to support exports and investments in important domestic services sectors including IT, audiovisual, and skilled labour mobility.

According to the agreement, the $100 billion investment promise made by the European Free Trade Association (EFTA) is dependent on a number of conditions, including a projection that India’s annual nominal GDP growth clocks at a 9.5% rate in dollar terms over the next 15 years.

The official text of the deal with the bloc of Switzerland, Norway, Iceland, and Liechtenstein notes that India can rebalance concessions if the committed foreign direct investments (FDI) do not come in, but only “temporarily”.


Editor’s Note: India and the European Free Trade Association (EFTA) have inked a significant free trade agreement aimed at fostering exports and investments, particularly in vital domestic service sectors such as IT and skilled labor mobility. The $100 billion investment pledge from EFTA is contingent upon India maintaining a robust annual nominal GDP growth rate of 9.5% in dollar terms over the next 15 years, with provisions for India to adjust concessions if committed foreign direct investments fail to materialize temporarily, according to the official text of the deal.

Cabinet approves more than ₹10000 crore to expand India’s AI sector

The union cabinet approved the comprehensive national-level IndiaAI Mission on March 7th, with a budget outlay of ₹10,371.92 crore, as part of a drive to “Make AI in India” and “Make AI Work for India.”

The goal of the IndiaAI Mission is to create an ecosystem that would promote innovation in AI by partnering with both the public and private sectors on critical initiatives.

It will promote the responsible, inclusive growth of India’s AI ecosystem by democratizing computing access, enhancing data quality, creating indigenous AI capabilities, drawing in top AI talent, facilitating industry collaboration, offering startup risk capital, guaranteeing socially significant AI projects, and supporting ethical AI.


India Semiconductor Mission: Govt to boost outlay to draw in more global chip manufacturers

Increased funding is the goal of the Ministry of Electronics & IT (MeitY) for the India Semiconductor Mission (ISM), a newly established autonomous enterprise under Digital India Corporation. The mission now has ₹76,000 crore in financing.

According to the top official, the government plans to try to establish two or three more semiconductor fabrication (fab) facilities in the country during the next two to three years.

The India Semiconductor Mission (ISM) was initiated by the administration of Prime Minister Narendra Modi in 2021, with a ₹76,000 crore budget allocated for semiconductor production, packaging, and design units. The selected applicants can receive up to 50% of the project cost in fiscal support under this plan, on a pari-passu basis.


Editor’s Note: The Ministry of Electronics & IT (MeitY) aims to bolster the India Semiconductor Mission (ISM) by increasing its funding to ₹76,000 crore, with plans to establish two or three semiconductor fabrication facilities within the next two to three years. Launched under Prime Minister Narendra Modi’s administration in 2021, the ISM aims to support semiconductor production, packaging, and design units by offering up to 50% of the project cost in fiscal support to selected applicants.

8% of the global market to be dominated by Indian SaaS goods by 2028

Indian SaaS startups are expected to take up 8% of the global market share by 2028, according to a report by 1Lattice and Sorin Investments. Presently, 6% of the worldwide market is occupied by Indian SaaS goods.

The Indian SaaS market is expected to grow to $37 billion by 2028, according to the analysis. The report does point out that it might take up to four years to achieve the next 2% increase in global market share. Additionally, efficiency and content-based marketing strategies are becoming the main priorities of Indian SaaS enterprises.

The current global market share of Indian SaaS products remains at 6%, but some domestic software firms are considering the US and Europe markets for their go-to-market strategy.


MediaTek to concentrate on premium smartphones using the newest 5G chipsets

With its most recent 5G chipsets, Taiwanese chip manufacturer MediaTek will focus more of its attention on the rapidly expanding premium category in the Indian smartphone market.

The chipmaker has over 15 design wins in the first quarter of 2024 and is collaborating with Android phone makers. The company offers a wide range of chipsets that cater to different market sectors, including flagship, mid-tier, and mainstream models. Its successful market penetration strategy has been aided by the chipsets’ superior quality and innovative features.

Prior to progressively shifting its focus to the high-end and premium market, MediaTek was mostly active in the entry-tier and mid-range categories.


Editor’s Note: MediaTek, the Taiwanese chip manufacturer, is redirecting its focus towards premium smartphones in the Indian market, leveraging its latest 5G chipsets. With over 15 design wins in the first quarter of 2024 and collaborations with Android phone makers, MediaTek aims to capitalize on its superior quality chipsets and innovative features to penetrate the high-end segment after previously targeting entry-tier and mid-range categories.門級和中階市場。

Modifications to the Space Sector’s FDI

The Foreign Direct Investment (FDI) policy on the space sector was amended, and the Union Cabinet approved it. The satellites subsector has now been divided into three distinct activity areas, each of which has set restrictions on foreign investment.

According to the current FDI policy, FDI is only allowed in the establishment and operation of satellites with government clearance. By establishing liberalised FDI thresholds for a range of sub-sectors and activities, the Union Cabinet relaxed the FDI policy on the space sector in accordance with the goals and strategy outlined in the Indian Space Policy 2023.

The space sector is eligible for 100% FDI under the revised FDI policy. The modified policy’s relaxed entry requirements are meant to entice prospective investors to fund Indian space enterprises.


Editor’s Note: The Union Cabinet approved modifications to the Foreign Direct Investment (FDI) policy in the space sector, dividing the satellites subsector into three distinct activity areas with set restrictions on foreign investment. With liberalized FDI thresholds and eligibility for 100% FDI, the revised policy aims to attract investors and foster growth in Indian space enterprises in alignment with the Indian Space Policy 2023.