Indian Economy : News,Discussions & Updates

Gautam

Senior member
Joined
Feb 16, 2019
Messages
5,039
Location
Tripura, NE, India
Reactions
2,973 914 0
Looking to atract some companies moving out of China ?? Good, better late than never.

Govt may permit 100% FDI in contract manufacturing: Report

1 min read . Updated: 11 Aug 2019, 02:25 PM IST, PTI
  • The report says the govt is working on a proposal to allow 100% FDI in contract manufacturing with a view to attract overseas investments
  • The current FDI policy does not talk about contract manufacturing and big firms across the world are going for this, so there is a need for a clarification


New Delhi: The government is working on a proposal to allow 100% FDI in contract manufacturing with a view to attract overseas investments, sources said.

According to the existing foreign investment policy, 100% foreign direct investment (FDI) is permitted in the manufacturing sector under the automatic route. A manufacturer is also allowed to sell products manufactured in India through wholesale and retail channels, including through e-commerce, without government's approval.

"The current policy does not talk about contract manufacturing and it is not clearly defined in the policy. Big technology companies across the world are going for this, so there is a need for a clarification on the matter which government is considering positively," they said.

The commerce and industry ministry is working on a proposal that would be finalised soon and sent for Union Cabinet's approval.

Commenting on the proposal, Rajat Wahi, Partner, Deloitte India, said the move if approved by the government will give a boost to the manufacturing sector.

"It is a welcome proposal for technology based companies like Apple," he said.

Finance Minister Nirmala Sitharaman in her Budget speech in July had proposed relaxation in the FDI norms for certain sectors such as aviation, AVGC (animation, visual effects, gaming and comics), insurance, and single brand retail with a view to attract more overseas investment.

FDI in India dipped 1% to $44.36 billion in 2018-19.

Last year, the government had relaxed FDI rules for several sectors, including single brand retail, non- banking financial companies and construction.Foreign investments are considered crucial for India, which needs billions of dollars for overhauling its infrastructure sector such as ports, airports and highways to boost growth.

FDI helps in improving the country's balance of payments situation and strengthen the rupee value against other global currencies, especially the US dollar.

Govt may permit 100% FDI in contract manufacturing: Report
 

Gautam

Senior member
Joined
Feb 16, 2019
Messages
5,039
Location
Tripura, NE, India
Reactions
2,973 914 0
Reliance Jio Gigafiber launch – Mukesh Ambani’s trump card on the Indian internet space

By Sanchita Dash
Aug 11, 2019, 18:32 IST
  • Reliance is set to launch Jio Gigafiber services and Jio Phone 3 on Monday.
  • Reliance Chairman Mukesh Ambani had announced the Jio Gigafiber services during the company’s AGM last year.
  • The service with its low tariffs is set to be a big gamechanger in the Indian broadband space.

Reliance is reportedly set to launch the much talked about Jio Gigafiber services and the Jio Phone 3 on Monday during the company’s Annual General Meeting.

Jio Gigafiber has been the talk of the town since Mukesh Ambani had announced it in the last AGM held last year.

What it offers

Gigafiber is a mega package offered by Jio, which will offer broadband, TV and fixed landline plans. But it’s not going to be an ordinary plan. Gigafiber is reportedly set to offer broadband services at 1 gigabytes per second (GBPS) speed, 600 TV channels and a landline connection – all of this at just ₹600 per month.

This will put Jio in direct competition with ACT broadband services, one of the most popular options in India right now. ACT, which is currently India’s largest fiber-based service provider, is also planning a ₹800 crore IPO soon.

Jio Phone 3

The AGM is also set to see the launch of Jio Phone 3. The previous two models which were priced at ₹1,500 and ₹2,999 have already been a big hit in the market, for giving smartphone features to a user at the most basic price. Jio Phone 3 is expected to take the features up a notch at an equally affordable price.

Can Gigafiber do a Jio?

The launch of Gigafiber will be a big boom in the Indian broadband industry because of lower tariffs and higher internet speeds. It is expected to have the same impact that Jio did when it launched. Jio, with its low tariff and faster internet speeds, has seen it become India’s second largest telecom provider within 3 years of its launch.

Reliance Jio Gigafiber launch – Mukesh Ambani’s trump card on the Indian internet space
 

Golden_Rule

Boundless Seeker
Joined
Dec 6, 2017
Messages
644
Location
USA
Reactions
429 241 0
Looking to atract some companies moving out of China ?? Good, better late than never.

Govt may permit 100% FDI in contract manufacturing: Report

1 min read . Updated: 11 Aug 2019, 02:25 PM IST, PTI
  • The report says the govt is working on a proposal to allow 100% FDI in contract manufacturing with a view to attract overseas investments
  • The current FDI policy does not talk about contract manufacturing and big firms across the world are going for this, so there is a need for a clarification


New Delhi: The government is working on a proposal to allow 100% FDI in contract manufacturing with a view to attract overseas investments, sources said.

According to the existing foreign investment policy, 100% foreign direct investment (FDI) is permitted in the manufacturing sector under the automatic route. A manufacturer is also allowed to sell products manufactured in India through wholesale and retail channels, including through e-commerce, without government's approval.

"The current policy does not talk about contract manufacturing and it is not clearly defined in the policy. Big technology companies across the world are going for this, so there is a need for a clarification on the matter which government is considering positively," they said.

The commerce and industry ministry is working on a proposal that would be finalised soon and sent for Union Cabinet's approval.

Commenting on the proposal, Rajat Wahi, Partner, Deloitte India, said the move if approved by the government will give a boost to the manufacturing sector.

"It is a welcome proposal for technology based companies like Apple," he said.

Finance Minister Nirmala Sitharaman in her Budget speech in July had proposed relaxation in the FDI norms for certain sectors such as aviation, AVGC (animation, visual effects, gaming and comics), insurance, and single brand retail with a view to attract more overseas investment.

FDI in India dipped 1% to $44.36 billion in 2018-19.

Last year, the government had relaxed FDI rules for several sectors, including single brand retail, non- banking financial companies and construction.Foreign investments are considered crucial for India, which needs billions of dollars for overhauling its infrastructure sector such as ports, airports and highways to boost growth.

FDI helps in improving the country's balance of payments situation and strengthen the rupee value against other global currencies, especially the US dollar.

Govt may permit 100% FDI in contract manufacturing: Report
No big Contract manufacturer Foxconn, Flex, Sanmina, etc will ever come in a big way in India without 100% FDI.
 

Golden_Rule

Boundless Seeker
Joined
Dec 6, 2017
Messages
644
Location
USA
Reactions
429 241 0
Foxconn is already in India.
Even Flex is in India. But not in a big way. They simply do the last part in CM, which is final assembly. These do not involve any SMTs.

SMT is the cream - where all kinds of components are mounted on multi-layer PCBs, then flashed with firmwares and then QA'ed. That is good money.
 

Gautam

Senior member
Joined
Feb 16, 2019
Messages
5,039
Location
Tripura, NE, India
Reactions
2,973 914 0
Surface Mount Technology
I don't know anything about computers/phones or the hardware & processes involved. If you could expand a little, that would be great.

We do make some PCBs in India right ? Don't make motherboards, RAM/memory, camera sensors etc. We have a long way to go, maybe we can make use of the Japan-South Korea trade spat to improve our industry.
 

Golden_Rule

Boundless Seeker
Joined
Dec 6, 2017
Messages
644
Location
USA
Reactions
429 241 0
I don't know anything about computers/phones or the hardware & processes involved. If you could expand a little, that would be great.

We do make some PCBs in India right ? Don't make motherboards, RAM/memory, camera sensors etc. We have a long way to go, maybe we can make use of the Japan-South Korea trade spat to improve our industry.
See the video I shared, the machines are basically programmed to repetitively produce PCBs at very high rates and very high volumes - like say the mother boards of Apple phones, etc

Also read Contract manufacturer - Wikipedia and related links
 

Gautam

Senior member
Joined
Feb 16, 2019
Messages
5,039
Location
Tripura, NE, India
Reactions
2,973 914 0
See the video I shared, the machines are basically programmed to repetitively produce PCBs at very high rates and very high volumes - like say the mother boards of Apple phones, etc
That was an awesome video. Thanks.
We do make some PCBs, but nothing of this level of complexity and automation. The video pretty much clarified where we are and where we need to be.
What about memory and other silicon based components though ? How badly are we doing there ?
 

Bali78

Well-Known member
Joined
Dec 26, 2017
Messages
795
Location
USA
Reactions
924 188 0
Even Flex is in India. But not in a big way. They simply do the last part in CM, which is final assembly. These do not involve any SMTs.

SMT is the cream - where all kinds of components are mounted on multi-layer PCBs, then flashed with firmwares and then QA'ed. That is good money.
It costs around $8 to assemble a phone in China. This is not a very lucrative job in absolute terms. But it can provide jobs to tens of thousands of people.
 

Golden_Rule

Boundless Seeker
Joined
Dec 6, 2017
Messages
644
Location
USA
Reactions
429 241 0
It costs around $8 to assemble a phone in China. This is not a very lucrative job in absolute terms. But it can provide jobs to tens of thousands of people.
I think it was around 4 years back, that Apple bought phones for around $290 each. And the breakup in CM business is roughly to the order of 72-75 % material cost, the rest 25-28% evenly divided into manufacturing cost, SG&A and Profit.

So, I doubt if it could be $8 per phone, at least not for Apple phones. It may be in the range of $20-25. The Chinese brands may have cheaper labor component.
 

Bali78

Well-Known member
Joined
Dec 26, 2017
Messages
795
Location
USA
Reactions
924 188 0
I think it was around 4 years back, that Apple bought phones for around $290 each. And the breakup in CM business is roughly to the order of 72-75 % material cost, the rest 25-28% evenly divided into manufacturing cost, SG&A and Profit.

So, I doubt if it could be $8 per phone, at least not for Apple phones. It may be in the range of $20-25. The Chinese brands may have cheaper labor component.
Check out this link.

China makes $8.46 from an iPhone. That's why a U.S. trade war is futile