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Display Manufacturing Needs Special Focus, Says ICEA

Display Manufacturing Needs Special Focus, Says ICEA

The government is providing 50% fiscal support under the Rs 76,000-crore semiconductor incentive scheme for display fabrication.
The India Cellular and Electronics Association (ICEA) emphasized on Tuesday the need for special attention to display manufacturing in India, which is currently the third-largest consumer of display products globally.
Despite the government offering 50% fiscal support under the Rs 76,000-crore semiconductor incentive scheme for setting up display fabrication units, none of the three applications received for display fabs have been approved so far.
“We have not made significant progress beyond display assembly. Displays constitute a major 15% to 20% of the Bill of Material, comparable to logic, memory, and semiconductors. This is a significant concern,” said Pankaj Mohindroo, chairman of ICEA.
The association, which includes companies like Apple, Foxconn, Lava, and other Chinese handset and electronics companies, stresses the importance of focusing on this sector to establish India as a robust display manufacturing hub.
Mohindroo added, “This sector needs special attention, and we are determined to make India a strong display manufacturing nation.”
Experts believe that display manufacturing in India offers a unique opportunity to attract international companies looking to diversify their supply chains. This would not only meet domestic demand but also enhance exports from India.
According to ICEA, the demand for displays in India is primarily driven by mobile phones, among other devices such as televisions, notebooks, tablets, and desktops.
The total demand for displays in the country increased to 338.4 million units in 2023, up from 303.7 million units in 2022, with mobile phones accounting for 310 million display units in 2023. The overall display demand in India is expected to reach 383.5 million units by 2026.

May 30, 2024
Indian PE-VC Investment Declines in 2023; Manufacturing Sector Shows 20% CAGR Growth Over Two Years

Indian PE-VC Investment Declines in 2023; Manufacturing Sector Shows 20% CAGR Growth Over Two Years, Says Report

The manufacturing sector in India has emerged as a strong investment opportunity, with around $2 billion in investments growing at a 20 percent CAGR over the last two years (2021–23).
Indian private equity and venture capital (PE-VC) investments softened to approximately $39 billion in 2023, reflecting a global trend, according to a report by Bain & Company. Traditional sectors such as manufacturing, healthcare, and energy demonstrated resilience, accounting for about 75 percent of investments in 2023, up from 60 percent in 2022.
The growth in the manufacturing sector, driven by supply chain diversification, government incentives, and the availability of scale assets, was highlighted in Bain & Company’s annual ‘India Private Equity Report 2024’, created in collaboration with the Indian Venture and Alternate Capital Association (IVCA).
With electric vehicle (EV) penetration in India expected to reach 40 percent by 2030, original equipment manufacturers (OEMs) dominated more than 70 percent of deal value in the past year. Significant investments (over $100 million) were made in companies such as Ola Electric, Ather Energy, Mahindra EV, and TI Clean Mobility. Additionally, packaging saw substantial deals in globally competitive companies with strong export performance, including Polyplex and Tufropes, both generating over 70 percent of sales from exports.
Gustaf Ericson, Associate Partner at Bain & Company, stated, “Advanced manufacturing is expected to see increased deal activity in the near to mid-term, driven by China+1 tailwinds, government incentives like PLI, and the emergence of scaled assets across multiple segments. We expect electronic manufacturing services, packaging, and EV players to benefit significantly from this favorable environment in the coming years.”
Despite a temperate outlook for India PE-VC dealmaking in 2024 due to global macroeconomic stabilization, traditional sectors such as advanced manufacturing are poised to attract substantial investments. This is attributed to positive fundamentals, supportive policies (like production-linked incentives and tax incentives), and the growth of scale assets across various sub-segments.
The EV market is anticipated to experience robust deal activity, especially in OEMs with scale assets planning capacity expansions or new product launches, as well as in charging infrastructure and battery-swapping players looking to expand geographically or into new EV segments.
Key investment drivers are expected in plastics, secondary paper, and glass, propelled by the F&B industry’s demand for premium, lightweight, cost-effective plastics, and the e-commerce sector’s shift towards sustainable packaging. Revenues for India-based packaging companies are projected to grow at around 10 percent CAGR between 2023-27.
Electronics production in India is forecasted to grow at a 25 percent CAGR over 2023-27, with mobile phones, IT hardware, and consumer electronics being the most attractive sub-segments for deal activity. This growth is driven by increased smartphone and consumer durable penetration, faster replacement cycles, significant export uptake by leading players, increased backward integration (e.g., into components), and a favorable duty structure for import substitution.
Additionally, global supply chain diversification is likely to benefit Indian manufacturers in export-oriented sectors like electronics, pharmaceuticals (especially APIs and CDMOs), and chemicals (specialty chemicals and agrochemicals), given their globally competitive scale and robust government support.
The Bain & Company report also noted that India-focused funds are increasingly diversifying across various sectors. Leading funds entered new sectors from 2021–23, with manufacturing, healthcare, new-age tech, and SaaS attracting the most new investments.
In 2023, India saw $29.6 billion in PE investments during a subdued year for private equity globally, marking an 18 percent drop from 2022’s peak value of $36 billion. PE accounted for around 75 percent of total PE-VC deal value, driven by large-scale deals for high-quality assets. VC investments dropped significantly to $9.6 billion in 2023 from $25.7 billion in 2022, as investors prioritized unit economics over growth and recalibrated strategies amid macroeconomic challenges.

May 29, 2024
India’s Chemical Market Set to Reach $29.7 Billion by 2024 with Steady Expansion Ahead

India’s Chemical Market Set to Reach $29.7 Billion by 2024 with Steady Expansion Ahead

The chemical sector’s growth is projected to create 1 million jobs in 2024, playing a crucial role in India’s economic landscape.
India’s chemical market, valued at $220 billion in 2023, is poised to grow to $383 billion by 2030, with an estimated compound annual growth rate (CAGR) of 8 percent. Globally, the industry’s growth rate is projected at 1 percent from 2021 to 2030. India ranks as the sixth-largest country in the global chemical industry by sales and has attracted substantial foreign direct investment (FDI), receiving $21.7 billion from April 2000 to September 2023.
The sector is fully open to foreign investors with automatic approval, enhancing investor confidence. Investments are expected to increase by $420 billion through Petroleum, Chemical, and Petrochemical Investment Regions (PCPIRs). Additionally, initiatives by the Central Institutes of Petrochemicals Engineering & Technology (CIPET) and the Institute of Pesticide Formulation Technology (IPFT) will boost skill development.
Specialty chemicals are anticipated to grow at a 12 percent CAGR from 2020 to 2025, driven by innovation and rising demand. The market is expected to expand by $29.7 billion by 2024, with a CAGR of 3.26 percent from 2024 to 2029.
Over the next five years, the market is expected to grow at a CAGR of 2.71 percent, reaching $143.3 billion. The number of businesses is predicted to rise to 15,730 by 2024, with employment in the industry expected to reach 1 million people.
New policies, improved infrastructure, and affordable labor resources are set to boost this sector further. Specialty chemicals, agricultural chemicals, and petrochemicals are identified as the most promising areas for growth.

May 28, 2024
Red Sea Crisis: Government Must Support MSME Exporters

Red Sea Crisis: Government Must Support MSME Exporters

The deteriorating security situation in the Red Sea has led to increased insurance rates and longer travel times for exporters.
Logistics costs significantly impact the country’s manufacturing sector, export competitiveness, and global positioning. The Red Sea route, known for being shorter and faster, was the preferred choice for most shipping companies. Ships transporting goods from major Indian ports like Mumbai and JNPT used the Suez Canal to enter the Mediterranean Sea and reach various European ports based on their destinations.
India heavily relied on this route for trade and energy imports. However, due to disruptions, exporters now have to diversify their trade routes. The worsening security in the Red Sea has resulted in higher insurance rates and longer travel times for exporters. Major shipping companies like Equinor and Maersk have increased their costs, severely impacting Indian companies. Disruptions in freight services and nearly a 50 percent increase in air freight charges have affected the export of perishable goods like vegetables, flowers, fruits, and eggs to the UK, the US, and other parts of the world.
Exporters are anxious about the significant increase in freight costs, which will inevitably impact India’s exports. In the 2023-24 financial year, Indian exports saw substantial growth in both volume and value, totaling nearly $450 billion, with MSMEs playing a crucial role.
The Indian research and information systems estimate that higher container shipping rates and delayed shipments due to route changes could lead to a significant drop in Indian exports in the coming year. Global supply chains have suffered as vessels now take longer routes for exports and imports. The immediate effects are increased freight costs, with small and medium industries in India being the major victims.
The global credit crisis means the world may not be able to absorb this hit. Government agencies need to support the MSME sector to maintain growth and achieve a $5 trillion economy. New markets for perishable goods should be sourced in Asian and Far Eastern regions.
Controlling export container pricing with an incentive mechanism could help mitigate the impact. Since seasonal perishable goods are at the highest risk, an urgent solution from government economic experts is needed.

May 27, 2024
India Logs Robust Business Activity Growth in May

India Logs Robust Business Activity Growth in May

Driven by a sharp acceleration in the services sector, India’s business activity expanded at its third strongest rate in nearly 14 years. The HSBC Flash India Composite Output Index, or Flash PMI, rose to 61.7 in May from 61.5 in April, according to data released by S&P Global on Thursday.
Services firms recorded a significant increase in business activity, the steepest in four months, while factory production rose at its slowest pace since February, stated S&P Global. Despite this, manufacturing continued to grow at a stronger rate than services.
In May, the HSBC Flash India Services PMI Business Activity Index increased to 61.4 from 60.8 in April, whereas the HSBC Flash India Manufacturing PMI Output Index decreased to 62.4 from 63.0.
The latest data highlights robust growth in new export orders across both the manufacturing and services sectors. At the composite level, international sales expanded at the fastest rate since the series began in September 2014, said S&P Global. “Respondents noted gains from many parts of the world, including Africa, Asia, Australia, the Americas, Europe, and West Asia.”
Pranjul Bhandari, chief India economist at HSBC, noted that although manufacturing sector growth slowed slightly in May due to a decrease in new orders and production, “the rise in output in the manufacturing industry continued to surpass that in the services economy.”
Meanwhile, reports of higher labor and material costs led to input prices across the private sector rising at the fastest pace in nine months. Increases were noted in prices for chemicals, food, plastics, electronic components, and electrical items.
Aggregate selling prices also rose more significantly in May. The manufacturing industry saw a faster increase in charges, contrasting with the trend seen for input prices, noted S&P Global.
Looking ahead, Bhandari mentioned that optimism for the year ahead reached its highest level in over 11 years, prompting firms to increase staffing levels. “However, higher input costs in both sectors led to further margin squeezes, particularly for service providers,” she said.
The Flash India composite PMI is a seasonally adjusted index measuring the month-on-month change in combined output from India’s manufacturing and services sectors. Flash data, derived from 80-90% of total survey responses, aim to provide an early indication of the final data, released during the first week of the month.
The index is compiled from surveys sent to panels of around 400 manufacturers and 400 service firms. Survey responses, collected in the second half of each month, indicate the direction of change compared to the previous month. A reading above 50 indicates expansion, while a reading below 50 indicates contraction.

May 24, 2024
Electronics Manufacturers Urge Indian Government to Introduce PLI Scheme for Components and Wearables

Electronics Manufacturers Urge Indian Government to Introduce PLI Scheme for Components and Wearables

A trade association representing major electronic manufacturers such as Asus, Dell, Google, Canon, and Dixon has appealed to the Indian government to introduce a production-linked incentive (PLI) scheme for electronic components and wearables. In a letter to S. Krishnan, the Secretary of the Ministry of Electronics and Information Technology, the Manufacturers Association for Information Technology (MAIT) emphasized that such incentives would not only boost exports but also enhance large-scale production capacity and attract investment in the electronics sector.
MAIT’s members, which include notable companies like Harman, Konica Minolta, and 3M, argued that a PLI scheme for hearables and wearables would help meet the government’s ambitious export targets. Dixon, one of the association’s members, manufactures laptops in India for Lenovo.
This appeal aligns with the Ministry of Electronics and Information Technology’s plans to introduce similar PLI schemes for the broader electronics ecosystem. Senior officials have indicated that the government will initiate a consultation process for a potential electronics components PLI after the current Lok Sabha elections conclude.
“For the component PLI, we should consider a unified PLI for electronics rather than sector-specific schemes to build a robust electronics industry. Focusing solely on one sector in the past has limited the effectiveness of the component PLI for mobiles,” MAIT’s submission stated, as seen by Moneycontrol.
The industry body also recommended that India’s forthcoming cybersecurity strategy align with international partners’ legislative or regulatory frameworks to create secure global supply chains and enhance collective security.
“The rise of global value chains and India’s PLI and Make in India initiatives have significantly boosted the country’s global trade, particularly in electronics and ICT sectors. At MAIT, we believe that for India to fully integrate into global supply chains, regulatory adjustments encouraging global investment and local company participation are crucial,” said Rajkumar Rishi, President of MAIT.
“As more companies consider investing in Indian manufacturing, we foresee accelerated growth in output, exports, and the overall economy. Developing a robust cybersecurity strategy is a top industry priority,” Rishi added.
Additionally, MAIT presented specific recommendations to various ministries and departments, including the Prime Minister’s Office, Ministry of Commerce and Industry, Ministry of Finance, and the Department of Telecom. The suggestions included:
– Supporting Ease of Doing Business initiatives.
– Considering tariff reforms to promote competitiveness and large-scale manufacturing.
– Opening investment limit enhancement under PLI for telecom.
– Excluding the telecom and electronics sectors from section 65A applicability to optimize the Manufacturing and Other Operations in Warehouse (MOOWR) scheme for these industries.
These recommendations aim to foster a conducive environment for electronics manufacturing in India, thereby strengthening the sector’s global position and economic impact.

May 23, 2024
India Has Sufficient Domestic Tyre Capacity; Imports Should Not Be Liberalised Through FTAs: ATMA

India Has Sufficient Domestic Tyre Capacity; Imports Should Not Be Liberalised Through FTAs: ATMA

India has ample tyre manufacturing capacity, and imports should not be liberalised through free trade agreements (FTAs) with duty concessions, according to the Automotive Tyre Manufacturers’ Association (ATMA). The industry body emphasized that domestic manufacturing capabilities in the automotive tyre sector are strong enough to make imports unnecessary, as communicated to the government.
This feedback was provided in response to the government’s inquiry about sectors where India can achieve self-reliance, to ensure that upcoming FTAs protect domestic industries, ATMA stated.
ATMA highlighted that India’s domestic tyre industry, one of the largest globally, produces over 200 million units annually across various categories, including two-wheelers, passenger vehicles, commercial vehicles, and off-road vehicles.
Despite these capabilities, tyres worth over Rs 2,000 crore were imported in the first three quarters of FY24, marking a 27% increase from the same period the previous year, ATMA noted.
“In recent years, the tyre sector has seen substantial investments, with leading manufacturers investing over Rs 35,000 crore in capacity expansion, technology upgrades, and research and development,” said ATMA Chairman Arnab Banerjee. “As new capacities come online, it is crucial to meet demand with domestic manufacturing rather than imports.”
Banerjee added that the domestic tyre industry is well-equipped to meet the needs of both domestic and international auto original equipment manufacturers (OEMs) in terms of design, development, and regular supply for all vehicle types manufactured in the country.
“The industry is ahead of the demand curve in producing all types of tyres. Auto OEMs are not importing tyres as the domestic industry meets their requirements,” Banerjee stated.
ATMA also pointed out that the domestic tyre industry is a significant employer, providing livelihoods to over 500,000 people directly and indirectly involved in manufacturing, distribution, and related services.
“Prioritising domestic tyre manufacturing is essential as it supports the livelihoods of over one million rubber growers in the country, with the tyre industry consuming over 70% of domestic natural rubber,” ATMA emphasized.
By promoting domestic production and leveraging technological advancements, India can strengthen its position as a global leader in the tyre industry while generating employment, promoting sustainability, and driving economic growth, ATMA asserted.

May 22, 2024
Impact of Bribery on SMEs: Standing Against Corruption May Cost Business Opportunities, Survey Reveals

Impact of Bribery on SMEs: Standing Against Corruption May Cost Business Opportunities, Survey Reveals

A global survey by the UK-based Association of Chartered Certified Accountants (ACCA) highlights the impact of bribery and corruption on SMEs worldwide. It found that 59% of SMEs and their advisers believe that resisting bribery and corruption could lead to lost business opportunities.
While strong anti-bribery policies might result in lost trade, many respondents acknowledged that these policies are ethically correct and could benefit businesses. According to the survey, 77% of respondents thought such policies would boost customer confidence, and 68% believed they would increase the chances of trading with larger businesses or public bodies.
“Many very small businesses lack the bargaining power to refuse small bribes, forcing entrepreneurs to choose between paying the bribe or losing the business,” said Jason Piper, ACCA’s Head of Tax and Business Law. ACCA has over 247,000 members in 181 countries.
Unlike large companies, SMEs often lack structured reporting lines and management frameworks, relying heavily on personal relationships and daily interactions. This can make it difficult to recognize and address corruption issues until they become severe.
The survey also found that 49.8% of respondents believe bribery and corruption negatively impact the business environment, with 66% viewing it as a concern.
Despite high awareness and perceived effectiveness of anti-bribery legislation, compliance costs remain significant for SMEs, with 48% of respondents agreeing that local anti-bribery laws have added to their expenses.
The implications for SMEs involved in bribery can be severe. Unlike large multinationals, small businesses often lack financial buffers, and money spent on bribes is money diverted from profits and local economic support, stunting investment and growth.

May 21, 2024
India Must Create 115 Million Jobs by 2030 to Sustain Economic Growth: Study

“India Must Create 115 Million Jobs by 2030 to Sustain Economic Growth: Study”

India needs to create 115 million jobs by 2030 as more people enter the workforce, according to a study, emphasizing the need to boost services and manufacturing to sustain economic growth.
Asia’s third-largest economy will have to generate 16.5 million jobs annually, up from the previous decade’s 12.4 million per year, according to Trinh Nguyen, a senior economist at Natixis SA. Of these, about 10.4 million jobs will need to come from the formal sector.
“To achieve this Herculean task, India’s growth engine needs to fire on all cylinders, from manufacturing to services over the next five years,” Nguyen wrote in a research note.
Although India’s economy is expected to grow by more than 7% this year — one of the fastest rates globally — this pace is still not sufficient to create jobs for its 1.4 billion people. High youth unemployment remains a significant challenge for Prime Minister Narendra Modi as he seeks a third term in the upcoming national elections.
Despite the creation of 112 million jobs over the last decade, only about 10% of these are formal, Nguyen noted. India’s overall labor force participation rate is 58%, much lower than other Asian nations, according to the World Bank.
Nguyen pointed out that India’s services sector, which constitutes more than half of the GDP, has limited capacity for headcount growth and labor quality. Therefore, India can leverage the manufacturing sector to compete with firms and countries looking to diversify away from a China-centric supply chain.
“The incoming administration needs to jump on the manufacturing train and capitalize on demographic and geopolitical tailwinds,” Nguyen stated. “Even if the road forward is challenging, it is never too late to walk down the right path.”

Originally Posted on: https://www.business-standard.com/economy/analysis/india-must-create-115-mn-jobs-by-2030-as-more-people-enter-workforce-study-124052001062_1.html

May 21, 2024
ET Make in India SME Regional Summit’s Second Session to be Held in Lucknow

ET Make in India SME Regional Summit’s Second Session to be Held in Lucknow

On May 25, the ET Make in India SME Regional Summit will reach its second city for this year’s edition. Lucknow, renowned for its nawabi heritage and famous handicrafts, will host small businesses, industry leaders, and entrepreneurs in an engaging summit organized by Economictimes.com.
According to the Udyam portal, Lucknow boasts 141,648 MSMEs, with 136,895 micro industries, 4,347 small enterprises, and 406 medium enterprises.
With a rich history in textiles and handicrafts dating back to the 16th century, Lucknow has become a hub for handcrafted textiles and leather goods. The city is home to numerous businesses involved in the export of apparel, textiles, and leather.
A report by CBRE South Asia highlighted that Uttar Pradesh is among the top three states contributing significantly to the Indian MSME sector, accounting for 9%. In this context, the ET Make in India SME Regional Summit will feature panel discussions and fireside chats addressing the challenges faced by the state’s labor-intensive MSMEs and craftspersons, and exploring ways to elevate their businesses to global prominence. The event will also provide a networking platform for enterprises, entrepreneurs, and industry leaders in the city and the state.
The ET Make in India SME Regional Summit series is held across the country to bring together local MSMEs, policymakers, enablers, and industry stakeholders. These summits aim to discover opportunities, address challenges, and promote knowledge-sharing and networking to drive the next phase of growth for Indian MSMEs. This year’s theme is “Empowering MSMEs: Driving India’s Century of Sustainable Growth,” aiming to champion and fortify Indian MSMEs. Each summit will feature panel discussions, masterclasses, and demonstrations of MSME solutions.
This is the second edition of the ET Make in India Regional Summit series. Last year’s inaugural edition covered Ahmedabad, Chennai, and Hyderabad, with a stellar turnout. The previous edition’s theme focused on enabling future-ready MSMEs to power the nation’s India@100 dream.
The purpose of these regional summits is to increase awareness, promote networking, and support industry-specific learning. These events aim to recognize the efforts and accomplishments of MSMEs in their respective areas, and assist them in discovering opportunities and strategies to become globally competitive and future-prepared.
The summits are hosted by Economictimes.com in collaboration with Adobe as the Associate Partner.

originally posted on: https://economictimes.indiatimes.com/tech/technology/how-to-choose-the-best-ecommerce-platform-for-your-online-store/articleshow/110213245.cms

May 20, 2024