IT & ITES GOVERNMENT OF GUJARAT - MANUFACTURING OF - INDEXTB

 
IT & ITES GOVERNMENT OF GUJARAT - MANUFACTURING OF - INDEXTB
Manufacturing of
Smart Meters, Smart Cards
and Smart Lighting

IT & ITeS
Government of Gujarat
IT & ITES GOVERNMENT OF GUJARAT - MANUFACTURING OF - INDEXTB
Contents

   Project Concept                                 3
   Market Potential                                8
   Growth Drivers                                  12
   Gujarat – Competitive Advantage                 15
   Project Information                             16
     - Location/ Size
     - Infrastructure Availability/ Connectivity
     - Raw Material/ Manpower
     - Key Players/ Machinery Suppliers
     - Key Considerations
   Project Financials                              23
   Approvals & Incentives                          24
   Key Department Contacts                         27

Page 2
IT & ITES GOVERNMENT OF GUJARAT - MANUFACTURING OF - INDEXTB
Project Concept
Smart Meters Overview
 The concept
 The project envisages setting up of smart meters, smart cards and smart lighting manufacturing.
 The manufacturing unit will focus on production, packaging, marketing, sales, distribution, etc. of
 the same.

 Smart Meters
    Smart meters measure attributes of electricity, natural gas & water delivered to consumers and
     transmit the information to utility companies digitally.
    Traditional electronic meters capable of only one-way communications are referred to as
     Automated Meter Reading (AMR). Smart meters replaces the old electronic meter with two-way
     communications technology for information, monitor, and control commonly referred to as
     Advanced Metering infrastructure (AMI).
    Smart meter systems collect data locally and transmit it to a data collector via local area
     network (LAN). The collector retrieves the data and transmits to the utility central collection
     point via wide area network (WAN) for processing and use by business applications. Since the
     communications path is two-way, signals or commands can be sent directly to the meters,
     customer premise or distribution device.
    Smart meters not only benefit the utility by lowering the operating costs by eliminating several
     physical activities such as meter reading, collections etc., but also provides immense benefits to
     the customers such as better outage restoration along with improved energy management.
                              Smart Meter System Basic Architecture

         Smart Meters          LAN            Collectors           WAN          Applications

                                    Types of smart meters

            Simple                               Basic                            Advanced

 Simple smart meter

Simple smart meter provides significant capabilities beyond the traditional automated meter reading
(AMR) systems, including low-speed or potential short-range communications. It may not
necessarily provide the full capabilities of AMI, such as hourly interval measurements or reasonably
symmetric two-way communications.

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IT & ITES GOVERNMENT OF GUJARAT - MANUFACTURING OF - INDEXTB
Project Concept
Smart Meters Overview
Basic smart meter

Basic smart meter records customer usage and other parameters, hourly or more frequently. It also
provides daily or more frequent transmittal of measurements over a two-way communications
network to a central collection point.

Advanced smart meter

Advanced smart meter combines a basic smart meter with additional capabilities for remote
disconnect-reconnect and home area network (HAN) gateway functions.

 Advantages of smart meters

                  Reduced cost of meter                Reduced back office
                   reading                               rebilling
                  Eliminates handheld                  Early detection of
Customer           meter reading equipment               meter tampering and          Revenue
Services          Reduced call center                   theft                        Cycle
                   transactions                         Reduced billing errors       Services
                  Reduced collections and              Accurate billing
                   connects/disconnects

                  Better data access to                Improved transformer
                   manage energy use                     load management and
                  Timely billing                        capacitor bank switching
                                                        Improved data for more       Transmission
Utility           Improved/increased rate
                   options                               reliable service, losses,    and
Customers                                                and loading                  Distribution
                  Improved outage
                   restoration                          Improved data for
                                                         efficient grid system
                  Power quality data                    design

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IT & ITES GOVERNMENT OF GUJARAT - MANUFACTURING OF - INDEXTB
Project Concept
Smart Cards Overview

 Smart Cards
    Smart cards are pocket-sized cards embedded with integrated circuits that can be used for
     individual identification and authentication by organizations in several sectors such as banking,
     financial services, and insurance (BFSI); transportation; government; healthcare and others.
    Smart cards are capable of connecting to a reader with direct physical contact or with a remote
     contactless radio frequency interface. With an embedded microcontroller, smart cards have the
     unique ability to store large amounts of data, carry out their own on-card functions and interact
     intelligently with a smart card reader.
    Major advantages of smart cards include ability to track records in real-world applications,
     highly durable, quality adherence to international standards and secure storage of data.

                                      Types of smart cards

          Contactless                                                        Contact-based

  Contactless smart card

  Contactless cards generally use the radio-frequency (RF)
  induction technology for data and information transfer. These
  cards use inductors to capture the incident RF interrogation
  signal, which is rectified and used as power for the card's
  electronics. The card then sends signals to the card reader,
  which transfers the data and information into the system.
  These smart cards sometimes require a PIN to access
  various applications, such as transit ticketing and payment.

  Contact-based smart card

  Contact-based cards include gold-plated contact pads having
  a contact area of approximately one square centimeter.
  These contact pads provide electrical connectivity when
  inserted into the card reader. The readers act as a
  communication medium between the point of sale system or
  computer and the smart card. They help transfer the data in
  the card into the system, enabling monetary transactions or
  information transfer through the card.

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IT & ITES GOVERNMENT OF GUJARAT - MANUFACTURING OF - INDEXTB
Project Concept
Smart Cards Overview

 Smart Cards Memory
    Smart cards have 3 types of memory viz. permanent memory, programmable non-volatile
     memory and volatile memory.
    Permanent memory is primarily known as read-only memory (ROM) and is generally placed in
     the smart chip at the time of manufacture. The ROM in a smart chip can never be changed.
    Programmable non-volatile memory, also known as electrically erasable programmable read-
     only memory (EEPROM), helps increase the smart card's flexibility by permitting changes in the
     program after manufacturing.
    Volatile memory or random access memory (RAM) is a temporary storage area designed in
     a way that it loses its content when the power supply to the card is blocked.

 Applications

                                  Use of electronic purses to make payments at retail stores and for
      Financial                    online shopping.
     applications                 NFC-based payments and contactless credit and debit card.

                                  Electronic toll collection and automatic fare collection for parking
  Transportation                   lots.

                                  Smartcards can be used at enterprises to secure access to
 Enterprises and                   workplace.
      Retail                      In retail, loyalty points for shopping can be offered through
                                   contactless smart card.

                                  In healthcare, smart cards can secure patient's information and
                                   reduce healthcare fraud.
  Healthcare and
                                  Smart cards can be used by educational organizations to provide
    Education                      holders with access to libraries, vending machines, and
                                   transportation facilities.

     Government                   Smart cards can be used for contactless identification of citizens.

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IT & ITES GOVERNMENT OF GUJARAT - MANUFACTURING OF - INDEXTB
Project Concept
Smart Lighting Overview

 Smart Lighting
    Smart lighting are embedded with wireless chips to communicate wirelessly with mobile
     computing devices such as smartphones and smart watches.
    It comprises of the Internet of Things (IoT) which is a network of physical or tangible devices
     such as smart appliances and smart TVs that can communicate among themselves and with
     the external environment when required using the internet.
    Smart lighting offers several benefits such as optimized decision-making, ease of handling
     emergencies, reduced cost, enhanced quality of living, remote control access, effective time
     management, and improved safety and security.

Wireless Industry Alliances
    Smart or connected lighting enables consumers to control their lights via wireless technologies
     such as Bluetooth low energy (BLE), ZigBee, Wi-Fi, Z-Wave, Thread, and 6LoWPAN, open
     source, etc.
    Several industry players have collaborated to establish wireless alliances to enhance
     compatibility and interoperability among IoT devices. Some of them are listed below.

 Wi-Fi Alliance

 Wi-Fi Alliance is an industry trade group that endorses Wi-Fi technology and gives certification to
 Wi-Fi products that conform to certain standards of interoperability.

 ZigBee Alliance

ZigBee Alliance sets innovative standards for connecting several devices and enables
organizations to assist their customers in creating M2M wireless sensor networks.

 HomePlug Powerline Alliance
HomePlug Powerline Alliance is a group of electronics manufacturers, retailers, and service
providers which establishes standards for several powerline communication technologies.

Consortium for Smart Energy Profile 2 Interoperability

The Consortium was founded by HomePlug Powerline Alliance, Wi-Fi Alliance, and ZigBee
Alliance to establish the interoperability of products.

Open Source Software
For the projects under Digital India, to "ensure efficiency, transparency and reliability of such
services at affordable costs“; the OSS is promoted and included in the policy form by Government
of India.

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IT & ITES GOVERNMENT OF GUJARAT - MANUFACTURING OF - INDEXTB
Market Potential
Smart Meters

 Global Smart Meters Market

Global Smart Meters Unit Shipments 2013-2023 (in million units)

                                                     114          112     116
                                            105            109
            94      97     89         92
    87
                                79                                                 3%
                                                                                   Expected CAGR for
                                                                                   global smart meters
                                                                                   shipments from 2013
                                                                                   to 2023

                                                                                   Source: Navigant Research
    2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

   Asia Pacific is the biggest smart meters market in terms of installed base and revenue while
    North America has the largest smart meter penetration.
   The global smart meters market revenue is expected to grow from $4.4m in 2013 to reach
    $6.6m in 2023 at a CAGR of 4.2%.
   European smart meter deployments is expected to increase on account of countries like UK and
    France moving ahead with widespread rollouts to meet the EU target of 80% penetration by
    2020.
   Major growth in the new decade is expected to be achieved on back of upgrades in China and
    India. Shipments in Latin America will also help spur growth, as countries like Brazil, Mexico, and
    Chile are expected to deploy smart meters as part of grid modernization.

Smart Meters: Indian Scenario
                                                                        Planned AMI rollout
   Central Electricity Authority has developed
    specifications for smart meters. With 14 pilot                          Customers with connected
    projects scheduled, the smart meter installation             2017        load over 20 kW
    base is expected to reach about 1.5m by 2017.
   The pilot project in Puducherry has already
    completed the first phase of implementation
    and early results indicate encouraging results in                       Roll out AMI for all three-
                                                                 2022        phase connections
    terms of loss reduction and demand response.
   The results from testing of all the 14 pilot
    projects will be further used to implement an
    aggressive rollout, which is expected to reach                          Full scale nationwide roll out
    150m smart meters by 2027.                                   2027        of AMI-based smart grid

Source: India Smart Grid

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IT & ITES GOVERNMENT OF GUJARAT - MANUFACTURING OF - INDEXTB
Market Potential
Smart Cards

 Global Smart Cards Market

Global Smart Cards Unit Shipments 2015-2020 (in billion units)

                                                                   13.29
                                                     12.09
                                         11.05
                   9.34      10.13
         8.64                                                                     9%
                                                                                  Expected CAGR for
                                                                                  global smart cards
                                                                                  shipments from 2015 to
                                                                                  2020

       2015        2016      2017        2018        2019          2020           Source: EMIS

    The global smart cards market is expected to grow from $8.3b in 2015 to reach $12.4b in
     2020 at a CAGR of 8%.
    The growth of the market is expected to be driven by an increase in the replacement of
     magnetic tape with smart cards. While BFSI is the major revenue contributing sector, other
     sectors such as healthcare, telecommunication and retail are also likely to experience growth,
     positively affecting the overall market growth.

Share of contactless smart cards in the global smart cards market on the basis of revenue
2015-2020

         Others      75%          38%          49%           55%           44%          31%

                    25%           30%          37%           45%           56%          69%
     Contactless

                           2015         2016         2017          2018          2019         2020

    Share of contactless smart cards is expected to more than double from 2015 to 2020 in the
     overall global smart cards market on account of advancements in technology, growing popularity
     of contactless smart cards in Asia Pacific along with rising number of banks and payment
     platforms offering smart card payment solutions.

  Source: EMIS

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IT & ITES GOVERNMENT OF GUJARAT - MANUFACTURING OF - INDEXTB
Market Potential
Smart Cards

Smart Cards: Indian Scenario
Smart Cards Unit Shipments 2009-2013 (in million units)

                                                           1,354
                                            1,180
                                 1,000
                        812                                            25%
        561                                                            CAGR for India smart cards
                                                                       shipments from 2009 to
                                                                       2013

       2009          2010        2011        2012          2013             Source: RNCOS

    The smart cards market in India accounted for INR31b in 2011 and grew 19% to reach INR37b
     in 2012.
    Smart Card Information Technology (SCIT), one of the largest manufacturers of smart cards,
     produces close to 35 lakh smart cards a month for the RSBY scheme.
    Smart cards-based identity cards, driver's licenses, e-passports, voter IDs, and vehicle
     document smart cards are already widely used in India.
    The growth of smart cards market in India is expected to be driven by government’s e-
     governance initiatives in several sectors such as government, healthcare, transportation and
     defence.
    Various Government initiatives such as Make in India, Digital India, Smart Cities and Skill India
     have helped generate the momentum of manufacturing and consumption rise in the Country.
             “Make in India” campaign was launched in 2014 to attract investments in manufacturing
              in India. The campaign aims to develop India as a manufacturing hub by eliminating
              redundant regulations and shortening bureaucratic processes. The initiative is expected
              to support the communication and electronics equipment manufacturing as significant
              investments are expected in the next two to three years.

                                                                              Total Domestic
          Opportunity Size               Total Manufacturing ($ B)
                                                                             Manufacturing ($ B)
                 2012                               0.21                            0.13
                 2015                               0.52                            0.57

           Top 4 Components
         Chip            PETG
     Software OS        Antenna

Page 10
Market Potential
Smart Cards

   Market dynamics of smart cards have time and again posed operational
              challenges for stakeholders in the Indian market

             1                        2                             3
   Chip suppliers
   Chip suppliers       System  Integrators        Active consortiums
                        System integrators
   x Hitachi                                       Active consortiums
   x Infineon           x   AFTEK                  x CEPS
   x MosChip                                       x NIC (National Informatics Centre)
                        x   CMS
   x NXP                                           x SCAFI (Smart Card Forum of
   x ST Micro           x   EFFKON                   India)
   Card suppliers
   Card suppliers                                  x SMARS (Smart Rupee System)
                        x   Explore Infotech
   x Bartronics                                    x Zero Mass
   x ERG                x   iSmart International
                                                   ƒ   Promote smart card based
   x Gemalto
                        x   M -Tech                    transactions in payment and
   x IRIS
   x Kedia
                                                       identification areas
                        x   Score Infotech
   x M -Tech                                       ƒ   Refer standards and
   x Orga               x   SISL                       specifications
   x Siepmanns
                        x   Smart Chip
   x VCT                                           User segments:
                                                        Segments:
   Reader suppliers     x   Wipro                  ƒ Government Sector
   Reader suppliers
                        x   Xident                 ƒ Telecom
   ƒ CMS
   ƒ Data Net Systems                              ƒ Non – Telecom
     Ltd.
   ƒ Gemalto
   ƒ M -Tech

Page 11
Market Potential
Smart Lighting

 Global Smart Lighting Market
 Global
   ob Connected Bulbs Unit Shipments
  lo                                                   Average Selling Price smart LED bulbs
 2015-2020 (in million units)                          2015-2020 ($ per unit)

                                            191.8
                                                       75.7

                                    106.6                      50.2

                                                                        32.1
                            50.7                                               21.6
                                                                                      14.6   11.2
              9.6    23.1
      3.7

     2015    2016    2017   2018    2019    2020       2015   2016      2017   2018   2019   2020
 Source: ELCOMA

    The global connected bulbs market is expected to grow from $0.3b in 2015 to reach $2.2b in
     2020 at a CAGR of 50%.
    The global connected bulbs shipments are also expected to grow at a strong CAGR of 120%
     from 2015 to 2020.
    The smart lighting market is expected to grow on account of the growing penetration of smart
     homes which are expected to reach 244m by 2020, rising focus on energy-efficient lighting
     solutions along with an expected 80% decline in the average selling price of smart LED bulbs
     from 2015 to 2020.

 Smart Lighting: Indian Scenario

    The lighting industry in India witnessed a strong growth of 59%
     from INR85b in 2010 to reach INR135b in 2013, driven primarily
     by the move from GLS lamps to CFLs.
    However, as the percentage usage of lighting in India continues
     to be much higher than developed countries at 18% (3-6% higher
     than in developed countries) of the total power consumption,
     adoption of LEDs and smart connected bulbs are expected to
     increase as supported by ongoing government initiatives.
    The LED industry is thus projected to grow dramatically on the
     back of the initiatives to acquire ~60% share in the overall
     lighting industry by 2020.
    Smart street lighting market in India is expected grow at a CAGR
     of 42.2% from 2016 to reach US$1,869m in 2022.

 Source: EMIS

Page 12
Growth Drivers

Indian Smart Meters Industry

                          Aggregate technical & commercial losses (network losses) are
                           considerably high in India’s power distribution segment amounting
    High
     Highnetwork
          network          around an average of 27-28%.
       losses
        losses            Smart meters can help reduce network losses by increasing energy
                           efficiency and improving load management.

                          Smart meters can reduce labour costs by eliminating the need to
                           dispatch staff regularly to record meter consumption data or to
                           connect or disconnect service.
     High labour          They can also detect and record theft of electrical service. In 2014,
   costs and thefts        Uttar Gujarat Vij Company Limited (UGVCL) and central government
                           invested INR480m by entering in a 50-50 partnership to set up new
                           infrastructure, meters, servers and analytic systems for smart grid in
                           a bid to curb power theft.

                          India’s rising power consumption is driving the need for demand
                           side management systems. Smart meters can enable utilities in
                           developing systems gathering information on customer peak
      Peak load            demand and their time of usage.
     management           In 2014, UGVCL installed 20,000 smart meters in residential and
                           industrial units in Naroda to monitor data under a pilot study to
                           understand the consumer behaviour of electricity usage and
                           propose a tariff structure based on usage and load.

                          The central government’s commitment of US$5.1b towards
                           Integrated Power Development Scheme for strengthening the sub-
    Grid reliability       transmission & distribution network and metering in urban and semi-
                           urban areas is expected to drive the demand for smart meters.

                          Smart meters provide utility customers with timely data regarding
       Customer            consumption and costs enabling them to make informed decisions
   engagement and          about energy usage.
   billing accuracy       Smart meters also eliminate estimated consumption thereby
                           increasing billing accuracy.

Page 13
Growth Drivers

 Indian Smart Cards Industry

                         The government plans to deploy several e-governance projects such
                          as National Population Register Project, Mahatma Gandhi National
                          Rural Employment Guarantee Act, Rashtriya Swasthya Bima Yojna,
    E-governance          Driver License, Ration Cards etc. all of which are expected to drive
      initiatives         the demand for smart cards in the future.
                         In 2016, Gujarat government made property cards compulsory for
                          some properties in urban areas. The new property cards will be in
                          both the smart card and paper format.

                         Modernization of public transport systems is driving the increased
                          usage for smart cards in the transport industry.
                         In July 2016, Bangalore Metropolitan Transport Corporation (BMTC)
  Modernization of
                          launched a travel smart card providing electronic ticketing, thereby
  public transport
                          making travel more commuter friendly.
     systems             Gujarat government also launched S-Connect smart card in Surat
                          which enables traffic violators to pay fine through a cashless
                          transaction.

                         Spending through debit or credit cards has increased significantly
                          over the last few years. The shift towards the VISA international
                          Cards from the debit cards in the BFSI is further driving the smart
  Increasing use of
                          cards market in India.
      electronic         In 2016, ICICI Bank in association with Ahmedabad Municipal
    transactions          Corporation (AMC), launched 'Smart City Pre-paid Card' enabling the
                          residents of the city to pay for facilities such as taxes, bills, entry fee
                          to common city areas and at retail outlets through the smart card.

 Indian Smart Lighting Industry

                         In 2016, Cube26 launched ‘IOTA Lite,’ a smart bulb that can be
   Introduction of        connected with a smartphone to perform several key functions such
  affordable smart        as turning power on or off, colour adjustments etc. at a price of
        lights            INR1,899. Syska LED also launched its smart light, ‘Gold Rainbow
                          LED Bulb,’ at the same price.

Page 14
Growth Drivers

 Indian Smart Lighting Industry

                       Various wireless networking technologies such as Bluetooth, Wi-Fi,
                        ZigBee and Z-Wave has led to the advent of next-generation lighting
                        systems.
    Emergence of       Based on the IEEE 802.15.4 standard for personal area networks,
    new wireless        Zigbee is emerging as a leader in the low-power networking market.
    technologies        The same wireless networking technology (Zigbee) is also used in
                        the Philips ‘Hue system’ launched in India in 2015.
                       Philips Hue Personal Wireless Lighting Kit is priced at INR16,495.

                       Government of India has taken several initiatives to introduce smart
                        street lighting systems. In 2016, Tiruchirappalli City Corporation
                        entered in a INR303m PPP to install a Supervisory Control and Data
                        Acquisition (SCADA) system to remotely operate and monitor street
     Government         lights in all 65 wards of the city.
      initiatives      Other state governments such as Himachal Pradesh, Jammu and
                        Kashmir along with others have also started implementing smart
                        street lighting in a bid to reduce their power demand.
                       All these initiatives are expected to drive the demand for smart
                        lighting in India.

                       Government of India plans to modernize 98 cities into smart cities in
                        three phases from 2016 to 2018.
                       Major aspects of a smart city includes smart grids and smart urban
     Smart Cities       lighting along with others. With 6 smart cities planned in Gujarat
                        (Gandhinagar, Ahmedabad, Surat, Vadodara, Rajkot, Dahod), the
                        demand for smart lighting is expected to grow substantially in the
                        state in near future.

Page 15
Gujarat - Competitive
Advantage
 Key advantages

                                    Key industries: Gujarat is
 Ease of Doing Business:            the leader in key industrial     Favourable labour policy:
 Gujarat is the only state to       sectors.                         The Gujarat government has
 have 100% compliance with
                                                                     recently passed the Labour
 environmental procedures.             Gujarat has attracted
                                                                     Laws Bill (December 2015),
 The state also fares highly in         cumulative FDI equity
                                                                     to give an impetus to
 terms of allotment of land             worth US$13.3b from
                                                                     industrialization. The key
 and obtaining a construction           April 2000 to March 2016.
                                                                     reform includes a provision
 permit, obtaining
                                       Gujarat contributed          for out-of-court settlement to
 infrastructure related utilities
                                        around 19.1% to India’s      speed up the process labour
 and compliance with labour
                                        total exports of goods in    related dispute resolutions.
 regulations.
                                        2014-15

 Easy availability of raw materials: Many key industrial
 clusters such as foundry & forgings, steel pipes and tubes, steel
 re-rolled products and fabricated metal products are located in
 close vicinity of industrial hubs such as Sanand industrial
 estate.

 Gujarat is a power surplus states in the country, as a result it
 helps in bringing huge amount of investment from the
 industries and is known as preferred investment destination in
 the country

 Gujarat contributes 7.2% of the Nation’s GDP and shows
 leadership in many areas of manufacturing and infrastructure
 sectors. Gujarat’s SDP (State Domestic Product) at current
 price registered a growth of 11% during the year 2014-15.

 In 2013, Gujarat had about 120 engineering colleges with an
 intake of 61,000 students per year. 3,100 seats were added in
 2013 along with four new engineering colleges. This ensures
 adequate pool of skilled workers in the state.

Page 16
Electronics and IT SEZ
in Gujarat
 IT/ITeS and electronics regions
    Gujarat Government enacted the Special investment regions (SIR) act in 2009 with the objective
     of creating large size investment regions in the state and develop them as global hubs of
     economic activity supported by world class infrastructure.
      The state has three SIRs for electronics manufacturing.

    SEZ are special duty free enclaves for the purpose of trade. These zones are self-contained and
     integrated, having their own infrastructure and support services. Apart from state-of-the-art
     infrastructure and access to a large skilled work force, the SEZ also provides enterprises with
     attractive incentives.
      The state has one electronics SEZ at Gandhinagar and 14 IT/ITeS SEZs - six at Ahmedabad,
         four at Gandhinagar, three at Vadodara and one at Valsad.

                                                                             Ahmedabad

                                                                             Gandhinagar

                                                                             Viramgam
                                                                             Halol-Savli
                                                                             Vadodara
                                                  Tourist                    Navlakhi
                   Electronics SIR                 flow*
                   IT/ITeS SEZ
                   Electronics and IT/ITeS SEZ                               Valsad

 Promotion of IT/ITeS and electronics industries
    Gujarat Government introduced a new IT policy to provide a proactive and industry-friendly
     climate for the IT industry. Incentives and assistance would be provided in allotment of land,
     development of IT/ITeS parks, stamp duty concession, electricity duty exemption and capital
     assistance on lease rentals.
      The policy also intends to establish the state as a preferred IT destination for micro, small and
        medium enterprises (MSMEs) by providing assistance on quality certification, technology
        acquisition fund, skill enhancement, patent assistance, simplification of labour laws, subsidy
        on bandwidth for connectivity and exemption from zoning regulations.
    Gujarat Government introduced new Electronics policy with the aim of establishing a self-reliant
     ESDM industry that caters to needs of domestic and international market. The policy includes
     development of human resources, creation of local demand for electronics products, creation of
     eco-system for innovation and R&D, and incentives such as VAT/CST subsidy, single window
     clearance, uninterrupted power supply, registration and stamp duty concession and interest
     subsidy.
    Gujarat Government, recognising the need for additional support for Electronics & IT/ITeS start-
     ups and keeping this at the centre of its strategy as recognized by the Government of India,
     through ‘Start-up India initiatives and to supplement efforts in that direction has decided to come
     up with a focused policy for Start-ups in Electronics & IT/ITeS sector.
Page 17
Project Information

 Project location

 Key highlights (2016-17)

 Area                2,140 sq. km

 Population          13,91,753

 Literacy rate       85.77%
                                                                                  Tourist
                                                                                   flow*
 Focus areas         Electrical and electronics, food
                     processing, textiles, IT –ITES and
                     ceramics
                                                                                 Gandhinagar
Source: Brief Industrial Potentiality Report of Gandhinagar
        District, DCMSME 2016-17

  Reasons for considering Gandhinagar as a potential project site

    Gandhinagar is the capital city of Gujarat state and has seven special economic zones and 10
     industrial estates along with creative IT Park and Gujarat International Finance Tech City.

    Gandhinagar has been selected as one of the 100 Indian cities to be developed as a smart city
     under PM Narendra Modi’s flagship Smart Cities Mission.

    Presence of several electronics and engineering estates such as Gandhinagar Electronics
     Estate and Gandhinagar Engineering Estate. Gandhinagar also has several engineering and
     electrical machinery small & micro enterprise units.

    Government of India has approved setting up of semi conductor wafer manufacturing facility in
     Prantij, near Gandhinagar with an investment of INR 25,250 crore. This would provide a boost
     to electronics system design and manufacturing eco system in the region.

    Support infrastructure:
    NH-8 and 8C pass through the district and connect it with other major cities of the state and
     India. Western Railways connects the district with major cities in India such as Delhi and
     Mumbai via Ahmedabad. Nearest airport, the Sardar Vallabhbhai Patel International Airport, is
     located 22 km away in Ahmedabad.

Page 18
Project Information

Infrastructure availability

 All 6 regions (Kutch, Saurashtra, North, East, Central and South Gujarat) are
 well-connected with each other as well as with other cities in India

                                                                        Road

                                                    The state is well connected with district roads,
                Port/Air
                                                     state highways and national highways.
                                                    There are more than 300 state highways with a
     Gujarat exports are increasing                 total length of 19,761 km.
      every year and air/port
                                                    National Highways:NH-8A and State highways
      connectivity reduces the
                                                     further ease the transportation.
      transportation time.
     Kandla Port is located on the Gulf
      of Kutch. It is the largest port of
      India by volume of cargo handled.
     Gujarat has one international                                            Rail
      airport, Sardar Vallabhbhai Patel
      international airport, located in
      Ahmedabad.
                                                    Gujarat has a well connected rail network.
                                                    There are more than 100 railway stations
                                                     connecting several districts.

 The State Government ensures robust physical/industrial infrastructure & utility
 linkages

                                   Gujarat boasts of 24 hours 3-phase uninterrupted power supply.
                                   Gujarat Energy Transmission Corporation Limited (GETCO),
                     Power          Gujarat’s power transmission company operates a total of 1473
                                    substations with 400 KV, 220 KV, 132 KV and 66 KV system
                                    voltage.

                                   In addition to the existing infrastructure, Gujarat completed a state
                     Water          wide “water supply grid” spread across 1,20,769 km with capability
                                    to serve 75% of the Gujarat’s population.

Page 19
Project Information

 Manufacturing value chain - Electronics

                                                                Sourcing               Manufacture,
                                        Design
     R&D, IP ownership                                            and                    system
                                       services
                                                               fabrication              assembly

                                               Activities

    IP reusability         Form   factor design        Printed circuit         Manufacturing/
     management             Device                       board fabrication        assembly of the final
    New IP/                 architecture                Component
                                                                                   product
     architecture           Specification                sourcing                Complex mechanical
     development             assessment                                            assembly

                                                Distribution
                   Configuration                                              Marketing
                                                 and repair
                    and testing                                               and sales
                                                  services

            Configuration    of the        Packaging              Product/IP
                                                                             marketing
             final product                  Logistics            Sales and channel
            Systems integration            Fulfilment            management
            Testing                        After-sales services Branding & campaign
            Software loading                                      management

Key stakeholders                                  EMS provider / OEMs*

                              Suppliers         Plant          Testing
      OEMs/                   (Raw material,    equipment      equipment                      Distributors
                  ODMs*                                                        Distributors
      ODMs                    component)        suppliers      suppliers                      & OEMs

 *OEMS: Original equipment manufacture
 *ODMS: Original design manufacturer
 *EMS: Electronics manufacturing services

Page 20
Project Information

 Key smart meters manufacturers – India

            Schneider Electric
                                                       ICSA
                  Itron
                                                   Ami Tech India
               Landis+Gyr
                                              JnJ Powercom System
                Siemens
                                                   Maven Systems
                  Cyan

 Key smart cards manufacturers – India
                            Smart Card IT Solutions
                              Cardpro Solutions
                                     CMS
                          Siepmann’s Card Systems
                              M-Tech Innovations
                                   Syskom
                          Versatile Card Technology
                              Smart Chip Pvt Ltd

 Prominent smart lighting manufacturers – India

Page 21
Project Information

Key considerations for manufacturing smart meters
 Even though the Government has proposed low cost smart meters at a cost of US$15-US$25
 per meter, it is still on a higher side for wide-scale installations. Further, the wide-scale rollout of
 meters, AMI infrastructure, and upgraded IT systems involves significant investment often
 requiring government support to drive growth.

 Certain technical challenges persists in the manufacturing of smart meters. With multiple
 standards for meters and communications protocols available, devices can be incompatible
 across vendors. Interoperability testing and pilot projects to make sure the hardware and
 software work as planned is needed but can delay eventual rollouts.

 Utility consumers have raised health concerns related with radio frequency exposure and privacy
 concerns associated with smart meters. Following this, regulators in some countries such as
 Netherlands have mandated opt-out programs to placate those concerns.

Key considerations for manufacturing smart cards
 There are lack of standards to ensure interoperability among varying smart card programs. To
 overcome this, mobile service providers, transport operators, banking systems among others
 need to converge their efforts.

 Contactless smart card chips use advanced technologies and are complex to manufacture. Their
 complexity in terms of technology could hinder the adoption of banking and payment smart cards
 thereby affecting the overall growth of the smartcards market.

 Lack of funds along with several legal and technical issues have delayed or even cancelled
 number of government’s e-governance initiatives such as UID, E-passports, EPFO etc.

Key considerations for manufacturing smart lighting
 Even though manufacturers like Cube26 and Syska have introduced low-costs smart lighting
 solution, they are still incomparable to LEDs which cost around 1/4th the cost of smart connected
 bulb.

 Many consumers are still not aware of IoT technology and the numerous advantages it offers.
 This remains to be a daunting challenge to the vendors and hinders the overall growth of the
 smart lighting market.

 All IoT devices including smart lighting require reliable, high-speed Internet connectivity to
 function effectively. While developed countries like the US, UK and Japan have state-of-the-art
 Internet infrastructure, developing countries like India lacks basic connectivity.

Page 22
Project Financials

 Project cost
 The total project cost of setting up a smart cards facility at Gandhinagar will be ~INR17.39 crore
                            for a production capacity 10,00,000 smart cards.

Project components & specifications                      Cost (INR crores)     % of overall cost

Equipment and machinery                                         1.52                  8.7%
(includes cutting machine, printing machine and
computers with software)
Infrastructure development                                       5.0                  28.7%
Land                                                            10.87                 62.6%
Site area: 6 acres (24,281 sq. mtrs. @ INR4,480 per
sq. mtrs.)
Total cost                                                      17.39                 100%

The estimated project cost has been calculated based on the capital requirement/investment of a
typical smart cards unit. However, it may vary by individual project.

The total project cost of setting up a smart meters facility at Gandhinagar will be ~INR26 crore for
                       a production capacity 1,50,000 smart meters per month.

Page 23
Approvals/Incentives

 Approvals required

 •   For approvals, the project report should be submitted to respective District Industries Centres
     (DICs). DIC will forward the proposal to Industries Commissioner who will submit the report to
     State Level Approver Committee (SLAC) for final approval.

 Incentives from Government of Gujarat
 Government of Gujarat introduced Electronic Policy for the state of Gujarat (2016-2021) in order to
 establish Gujarat as a globally-recognized hub for the Electronic System Design & Manufacturing
 industry with a turnover of US$16 billion by 2021 and an investment of US$6 billion to create
 employment opportunities for 500,000 people by 2021.

 In addition to the assistance available under any of the schemes of the Government of India,
 eligible EMC and ESDM units will be entitled to the following assistance from Government of
 Gujarat.

Incentives to the Electronics Manufacturing Clusters (EMCs)
 Capital assistance to the greenfield EMCs
 Eligible area for greenfield EMCs                              Admissible          Maximum limit
                                                                assistance          (INR crores)
 Area less than 200 acres                                             25%                  25
 Area more than 200 acres                                             25%                  100

 Stamp duty and registration fee reimbursement
 • Developers of greenfield EMCs will be entitled to 100% reimbursement of the stamp duty as
   well as registration fee paid by them to the Government of Gujarat, towards lease/sale/transfer
   of land for the EMC.

 Uninterrupted availability of power and power tariff subsidy to EMCs
 • Government will contribute towards the cost of setting up feeder or sub-station (subject to a
   ceiling of INR5 crores) in order to provide uninterrupted and good quality power supply to the
   EMCs.
 • Power tariff subsidy will be given at INR1 per unit in the billed amount for a period of five years
   as promotional incentive on reimbursement basis. The subsidy will be applicable only when
   electricity will be purchased from the state electricity / power distribution licensee.
 • EMCs will be given 100% reimbursement for electricity duty paid for a period of 5 years from the
   date of approval of EMC.

Page 24
Approvals/Incentives

Incentives to the ESDM units
 Capital subsidy to the eligible ESDM units
                                                                                       Maximum
                                                   Admissible
 Gross fixed capital investment (GFCI)                                                 limit
                                                   subsidy
                                                                                       (INR crores)
 Investment up to INR10 crore                                    10%                          1
 Investment above INR10 crore but up to              INR1 crore + 5% incremental
                                                                                             25
 INR1000 crore                                        GFCI above INR.10 crores

                                                    INR25 crore + 5% incremental
 Investment above INR1000 crore                                                              100
                                                     GFCI above INR1000 crores

 Interest subsidy for a maximum period of five years to the eligible ESDM units
                                                                                       Maximum
                                                   Admissible                          limit per
 Borrowings
                                                   subsidy per annum                   annum
                                                                                       (INR crores)
 Up to INR10 crore                                                7%                          1
                                                    INR1 crore + 2% of borrowings
 Above INR10 crore but up to INR1000 crore                                                    5
                                                      in excess of INR10 crores

                                                    INR5 crore + 1% of borrowings
 Above INR1000 crore                                                                         10
                                                     in excess of INR1000 crores

 Reimbursement of stamp duty and registration fee
 • Eligible ESDM units will be entitled for reimbursement of 100% of stamp duty and registration
   fee paid to the Government of Gujarat for lease/sale/transfer of land for the first transaction.

 VAT/CST incentives: (subject to change after the introduction of GST)
 • The eligible ESDM units will be provided reimbursement of net tax paid under Section-13 of
   Gujarat Value Added Tax Act and 100% of Central Sales Tax (CST) for domestic sales outside
   Gujarat, limited to a ceiling of 90% of the GFCI made by the unit, for a period of 10 years.

 Other exemptions
 • Eligible ESDM units will be given power tariff subsidy at the rate of INR1 per unit in the billed
   amount and 100% reimbursement for electricity duty, for a period of five years.
 • Eligible units will be given the benefit of reimbursement of the EPF contribution made by them
   for their employees for a period of five years subject to overall ceiling of INR1 crore per annum.
 • Patent Assistance at the rate of 50%, subject to a ceiling of INR0.2m per patent for domestic
   patents and INR0.5m per patent for international patents, for meeting the expenditure for
   obtaining patents.

Page 25
Approvals/Incentives

Incentives from Government of India
 Modified Special Incentive Package Scheme (MSIPS)
 • The scheme provides capital subsidy of 20% in SEZ (25% in non-SEZ) for units engaged in
   electronics manufacturing. It also provides for reimbursements of non-creditable excise for
   capital equipment for the non-SEZ units.
 • Reimbursement of central taxes and duties for 10 years in select high-tech units such as fabs,
   semiconductor logic and memory chips, LCD fabrication.

 Electronic Manufacturing Clusters (EMC)
 • The GoI will provide financial assistance of up to 50% of the project cost (subject to a ceiling of
    INR500 million for every 100 acres of land) for the development of greenfield EMCs, and 75% of
    the project cost (subject to a ceiling of INR500 million) for brownfield EMCs.

 Electronics Development Fund (EDF)
 • In December 2015, the GoI announced setting up a special EDF worth INR100 billion to help
    generate an R&D ecosystem in electronics in India. The fund aims to boost IP generation and
    large-scale manufacturing of electronic goods in the country.

 Preferential Market Access (PMA)
 • In 2013, the GoI introduced PMA to give preference to locally manufactured electronic products
   in Government procurement (applicable to all ministries except Defence). The GoI procurement
   will not be less than 30% of the procurement value, with specified value addition requirements.

  Incentives to the start-ups

 Stamp duty and registration fee reimbursement
 • Eligible start-ups will be entitled to 100% reimbursement of Stamp Duty and Registration Fee
   paid on sale/lease/transfer of land and Office Space for the first transaction.

 Interest subsidy
 • Eligible start-ups will be provided interest subsidy at the rate of 9% per annum subject to a
    ceiling of INR0.2 million per year. Such interest subsidy shall be eligible for a maximum duration
    of two years.

 Patent assistance
 • Eligible start-ups will be provided assistance at the rate of 75% of cost of obtaining patent
   subject to ceiling of INR0.2 million per patent for domestic patent and INR0.5 million per patent
   for international patent.
 • Total quantum of assistance for obtaining such patents shall be limited to INR0.1 million for
   international and INR0.4 million for domestic patents per start-up.

Page 26
Department of Science & Technology, Government of Gujarat
                                           http://www.dst.gujarat.gov.in

                                            Gujarat Informatics Ltd.
                                      http://www.gujaratinformatics.com
                      Gujarat Electronics and Software Industries Association

                                               http://www.gesia.org/
                              Gujarat Industrial Development Corporation
                                                 www.gidc.gov.in

                                    Office of Industries Commissioner
                                              www.ic.gujarat.gov.in

                                         Industrial Extension Bureau
                                                www.indextb.com

This project profile is based on preliminary study to facilitate prospective entrepreneurs to assess a prima facie scope.
     It is, however, advisable to get a detailed feasibility study prepared before taking a final investment decision.

                                                                Department of Science and Technology
                                                                Block No.7, 5th Floor,
                                                                New Sachivalaya, Gandhinagar
                                                                Phone / Fax : 079-23259999
                                                                Email: secdst@gujarat.gov.in
                                                                https://dst.gujarat.gov.in/index.htm
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