Meeting of US India ICT Working Group Washington

Meeting of US India ICT Working Group, Washington Presentation On Opportunities for US Industries for establishment of Electronic Manufacturing / Testing Facilities in India by NK Goyal President CMAI Association of India, Chairman Emeritus TEMA, Vice Chairman ITU APT India www. cmai. asia, president_cmai@cmai. asia 6 th June, 2012 1

Advantage India • GDP crossed USD 1 Trillion Mark • 4 th largest economy in world when adjusted for purchasing power parity • Growing well in excess of 8% per annum for last three years. • Current GDP Growth: 8. 5% • USD 380 Billion Projected infrastructure investment in next 5 years • Large Domestic Market: - 560 million consumers in 20 -49 age group expected by 2015 - 5 th largest consumer market by 2025 - Increased disposable incomes & changing lifestyles • Human capital: - Third largest pool of scientific & technical manpower (2, 000 Engineering Gradates Annually) - Over 500 universities (20, 000 colleges) - Large English speaking population 2

Advantage India……contd. • Rise of Asia presents tremendous opportunities for growth in this Century • India, China are two big markets • US has opportunity to invest in Manufacturing from India to cater the Asian market • Huge Scope in several verticals…Health, Automobile, Aviations, Education, Banking, Commerce • Indian Government coming with new policies to attract investment

Advantage India……contd. • There is no ambiguity on India's 1. 21 billion population overtaking China's 1. 34 billion. However, it's not just the population that would see an upward swing. The economy is set to total $5. 6 trillion by 2020 from the present $1. 7 trillion, achieving a real GDP growth rate of 9. 2 per cent. If the Dun & Bradstreet prediction comes true, India's global economy ranking would be 7 th from the present 10 th • Over the next two years, India could attract FDI worth $ 80 billion, according to Morgan Stanley. • On the military front, India maintains the world's third largest active armed forces and is a nuclear weapon state too. According to Stockholm International Peace Research Institute, India is the world's largest arms importer, much ahead of China. • India, the Country with high rate of illiteracy, figures among them. • India can as well aim at the Sun with the kind of expertise it has in space technology. Vast pool of talent makes it a possibility. Very few Countries have the ability to launch their own satellites. 4

President USA HE Mr. Obama on India • HE President, Mr. Obama speaking to a packed reception hall at the State Department building in Foggy Bottom, on 4 th June, 2010 quoted from an eminent European scholar who travelled to India more than a century ago: • “Whatever sphere of the human mind you may select for your special study, whether it be language or religion or mythology or philosophy, whether it be law or customs, primitive art, or science, you have to go to India, because, " he said, "some of the most valuable and instructive material of the history of man are treasured up in India, and India only". • HE President Mr. Obama further said: "So when it comes to the sphere of our work, building a future of greater prosperity, opportunity and security for our people, there is no doubt; I have to go India. But even more, I am proud to go to India, and I look forward to the history that we will make together, progress that will be treasured not just by this generation but by generations to come. " 5

President USA HE Mr Obama on India…. contd. • White House during November, 2012 visit of President Mr. Obama, portrayed India as an economic opportunity too golden to pass up. President in Mumbai to a gathering of US and India business leaders said: • “ In our interconnected world, increased commerce between The United States and India can be and will be a win proposition for both Nations. ” 6

India Story Transparency & Accountability Attractive FDI location Right to Information Act Third most attractive FDI location in the world Road map for transitioning to IFRS Corporate governance initiatives Information Technology Act (AT Kearney FDI Confidence Index 2010) Roadmap for Direct Tax Code (DTC) and Goods and Services Tax (GST) Cost competitiveness Pro investment environment City Price Levels (including Rent) Net Wage Levels New York Tokyo Taipei Hong Kong Beijing Delhi Mumbai 100 88. 5 52. 2 74. 1 42. 4 34 30. 3 100 86. 4 40. 0 43. 9 14. 5 10. 3 7. 6 Source : Prices and Earnings Report August 2010, UBS • 100% FDI permitted in most sectors under automatic route, includes Electronics system design and Manufacturing (ESDM) • Consolidated FDI Policy available • Government has come up with several incentives to encourage investment and attract capital 7

India Story – Leaders Speak “We came to India for costs, stayed for quality and are now investing for innovation. ” Dan Scheinman, SVP and GM, Cisco Systems Inc. “India is a developing country, but it is developed Country as far as its intellectual infrastructure is concerned. We get the highest intellectual capital per dollar here. . ” Jack Welch, Former Chairman, GE “India has evolved into one of the worlds leading technology centers. ” Craig Barrett, ex-CEO, Intel Corp. “By 2032 India will be among the top 3 largest economies in the world. ” BRIC report, Goldman Sachs “India has taken its place in the world economy. You already have them in cars & autos, in electronics and systems. ” Jamie Dimon, Chairman and CEO JP Morgan “The Indian market has been growing very fast in recent years and we have found that some Taiwanese businesses are highly complementary to Indian corporations. ” Christina Liu, Minister, Council for Economic Planning and Development (CEPD) 8

Electronics Systems Design and Manufacturing (ESDM) - A Priority Sector for India Current and forecasted ESDM Demand in India, 2009 - 2020 E USD Billion +22% $*B $*B 2009 2014 E 2020 E Semiconductor content in electronic system projected to grow from 20% currently to 25% in the next 3 -5 years Forecasted ESDM demand by segment, 2020 E Semiconductor design Hi-Tech mnfg. Electronics Exports Components 20% 15% Others Electronics 6% Consumer 2% 1% 1% Mfr. Services 4% electronics 14% IT Systems and hardware 38% Telecom products and equipments 9

Favorable Policy Framework • A Triad of Policies to drive a National Agenda for ICTE - National Policy on Electronics - National Policy on Information Technology - National Telecom Policy • Vision To create a globally competitive electronics design and manufacturing (ESDM) industry to meet the country's needs and serve the international market. • Key Objectives Turnover in ESDM sector of USD 400 Billion by 2020 involving: - Investment of USD 100 Billion - Employment to 28 Million people at various levels • Achieve global leadership in VLSI, chip design and other frontier technical areas and achieve turnover of USD 55 Billion by 2020. • Increase export in ESDM sector from USD 5. 5 Billion to USD 80 Billion by 2020 10

Government Procurement of Electronics • Multi-billion dollar investment plans in mega programs offer tremendous opportunities for electronics manufacturing: - Roll out of Broadband to over 600, 000 villages – National Optical Fibre Network (NOFN) Plan approved - National Knowledge Network with 100 GB connectivity for over 20, 000 colleges and research institutions - National e. Governance Program spanning Central Ministries and all State Governments - National Mission to provide Computers to over 100, 000 schools - Digitization of Television Broadcast Network by 2015 - significant opportunity for Set Top Box consumption and manufacturing - Indian Unique Identification Project (UID) offers tremendous opportunities for technology and products (Biometrics, ID Cards, etc. ). - Roll out of 3 G, Wimax and 4 G 11

Setting up Semiconductor Fabs • Strong Semiconductor Design Ecosystem: - Nearly 2000 chips designed each year; 20, 000 Engineers; USD 10. 6 Billion Revenue by 2012 (17. 3% growth rate) - All the global top 10 fabless design companies have India operations - 23 of the top 25 semiconductor companies have strong presence in India • A High Level Committee set up for identifying technology and investors for setting up semiconductor fabs - Mandate: Assess and recommend quantum of Government support in physical / financial terms 12

India as a Semiconductor Destination Key players in the semiconductor ecosystem are already building presence in India IDMs Value chain Semi cap equipment EDA / IP Foundry ATMP Fabless Potential opportunity OEMs De. Core nanosemi IDMs Others IIT IISc. 13

India as a R&D Destination India is the leading country for R&D jobs Top 10 countries by estimated jobs in R&D 2009 India 12, 120 7, 290 US China Malaysia France 4, 000 3, 080 2, 460 Taiwan 2, 000 Canada 1, 990 UK 1, 850 Ireland 1, 720 Hungary 1, 540 Many outside India are also of Indian origin 1 Research related to characterization, fabrication and modeling Source: IBM Global location trends, ISA-Evalueserve study 2008 14

India: Telecom Manufacturing Opportunities • Second largest telecom penetration, world’s highest monthly additions. • 940 Million Subscribers: . Wireless: 910 Million • Indian Telecom sector to witness huge investments to the tune of USD 110 Billion during 2012 -2017. • Telecom Subscribers to cross 1. 5 billion by 2015 and 5 billion by 2020. • About 25 per cent (Approx. 300 million) would be 3 G/4 G subscribers, requiring scaling up the infrastructure. • About USD 70 Billion estimated investment in rolling out green field 2 G, 3 G/4 G and Wi. Max networks, while USD 25 Billion required to set up an extra 200, 000 - odd telecom towers across the country. • The total investment in the pan-India broadband rollout expected to be USD 20 Billion while another USD 20 Billion will be invested in augmenting the transmission network. 15

Electronics in Other Sectors • Automotive Electronics - Develop Centre of Excellence (Co. E) for MCUs, MEMS and other advanced electronic devices to consolidate India’s position as one of the global auto hubs • Avionics: Facilitate development of R&D and outsourcing of engineering design and related software in the country • LED: Encourage the use of LED lighting solutions especially in rural markets through innovative products • Industrial Electronics - Develop a Co. E for innovation with focus on affordable standardized products for segments such as textiles, food processing, steel etc. • Medical Electronics: Consolidate design and development of affordable medical electronics industry. Develop downstream manufacturing through sector specific cluster. • Solar Photovoltaic: Build manufacturing capacity to support the generation of 20 GW of solar power by 2020 • Information and Broadcasting: Create an eco-system for manufacture of settop boxes and other broadcast equipment in the country

Opportunities for Collaboration • Investments in potential ESDM opportunities in India including technology transfer • Participation in Centers of Excellence in Ø Automotive electronics Ø Medical electronics Ø Industrial electronics Ø Others • Joint R&D and innovation to develop products for India market • Opportunity for Venture Capital Funding • Adoption of best practices in e-waste management 17

Buy American Broadband Policy • The American Recovery and Re-investment Act, 2009 includes a ‘Buy America Provisions’ requiring that all iron, steel and manufactured goods used in public works projects financed under the Bill should be made in the US. It is reasonable to believe that apart from iron and steel products, lack of access to stimulus funded project had adversely impacted other manufactured products as well. • National Telecommunications and Information Administration (NTIA) is distributing $4. 7 billion of the $7. 2 billion earmarked for broadband deployments in un served and underserved areas • It provides BUY American condition for optic cables, coaxial cables, cell towers and other facilities that are in abundance in the United States • It granted a limited waiver for switching, access, transport, routing, customer premise and billing equipment as well as end user devices • The Rural Utilities Service (RUS) program in the U. S. Department of Agriculture, is in charge of giving out $2. 5 billion of the stimulus money. • Congress said funds provided under the law passed in February generally can't be used for iron, steel and factory goods not produced in the U. S. • Ohio order to curb off shoring (Aug 2010)

Thank You President_cmai@cmai. asia +91 98 111 29879 NK Goyal 19