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Make in India gets big push as Modi government awards 56 defence licences to private companies

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‘AGNI-III’ missile, passes through the Rajpath during the 59th Republic Day Parade-2008, in New Delhi on January 26, 2008.

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By NewsGram Staff Writer

Underlining its determination to have indigenous defence production as a cornerstone of its ‘Make in India’ drive, the Narendra Modi government has awarded a record 56 defence manufacturing permits to private sector entities in the past year.

According to the data released by the Department of Industrial Policy and Promotion (DIPP), a slew of applications, some of which had been pending for more than four years, have been cleared since the BJP government came to power.

The permits are the first step in the process to enable firms such as Mahindra, Tata and Pipavav  to set up production units for major military equipment.

The Tatas will now be able to upgrade major fighting units like the T 90 and T 72 tanks of the Indian Army while Mahindra has been given permits in a number of areas, including manufacturing naval systems like torpedoes, sea mines and boats.

Subsidiary companies like Mahindra Telephonics Integrated Systems and Tech Mahindra Ltd too have got defence permits.

The move stands as a major endorsement of the Indian private sector’s ability to operate in an arena that has until now been the preserve of foreign vendors and state-run entities.

Besides the established players, a number of new small firms are poised to enter the sector based on these clearances.

For example, Bullet Proof equipment manufacturer MKU will now be able to manufacture night vision devices while Bangalore-based Dynamatic Technologies has been granted a permit to manufacture Unmanned Aerial Vehicles.

Pipavav Defence and Offshore Engineering Company (PDOC), now being acquired by the Anil Ambani-run Reliance, has grabbed four permits to manufacture items ranging from medium tanks and howitzers to missiles, sensors and torpedoes.

In order to open up the defense sector, the government has started expediting clearances besides increasing the foreign investment limit for the defence sector to 49% and even up to 100% in select cases.

The process for application online and the validity of the Industrial license has been enhanced to seven years and speedy DIPP clearances are already being given for smaller items like components.

Complex matters such as the offset policy, blacklisting process as well as a specific route for the Make in India process are expected to be simplified through a new defence procurement policy, likely to be announced in the coming few weeks.

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Know Why the Vietnamese Governement Turns to Private Companies for Public Services Needs

Vietnam urges private companies to help the government serve public service needs

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vietnam government
Garbage collection is still a local government responsibility in Vietnam. Pixabay

Last year companies like Coca Cola and Tetra Pak, an international food packaging and processing company, collaborated with Vietnam’s biggest city to lower garbage levels. Their work included putting recycling bins around Ho Chi Minh City and investing in the waste management system.

Garbage collection is still a local government responsibility.

The collaboration, though, shows how Vietnam is increasingly looking at private companies to fulfill its national development needs.

Vietnam is at a turning point. The country used to rely on aid from nations such as Sweden and Canada, and that foreign funding helped Vietnam improve education, health care, and other public goods, and transform into a lower middle-income nation.

Foreign governments are cutting aid budgets globally, though, and Vietnam no longer qualifies for as much aid, so it is trying a new approach to development, making it a business.

vietnam government
Scavengers search for recyclable materials to be sold to recycling centres, at the Nam Son garbage dump, north of Hanoi. VOA

It matches marketing strategy to a need for investment dollars.

That means getting more companies involved in activities traditionally performed by government, with the intention of reaching Vietnam’s development goals.“

A series of ongoing market reforms is giving Vietnam a market-leading status in Southeast Asia, making it an increasingly attractive place for investors,” Nirukt Sapru, who is the chief executive officer for Vietnam, Southeast Asia, and South Asia at Standard Chartered Bank, said.

Elsewhere in the region, Malaysia struggled to introduce a fee to clean septic tanks when privatization occurred because residents had gotten used to that being a public service, already covered by tax dollars. Citizens globally have resisted when governments move to sell assets they think should be kept for public benefit, from airports in France to the oil business in Mexico.

One major donor, the U.S. Agency for International Development, though, thinks it’s a good idea for Vietnam to move toward more private sector involvement. In recent years it has promoted U.S. companies to work on Vietnamese development projects, such as energy and smart cities.”

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USAID provides development assistance for market-oriented reform and trade facilitation, including implementing a program to reinvigorate the public-private-partnership business model here in Vietnam,” said U.S. Ambassador to Vietnam Daniel Kritenbrink last year. (VOA)

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Make in India Most Beneficial For Mobile Manufacturers

How mobile manufacturing made the most of 'Make in India'

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Mobile manufacturers
India is today the second-largest mobile phone manufacturer in the world after China. Pixabay

From just two mobile phone manufacturing units in 2014 to 268 mobile handset and accessories manufacturing units in 2019 which has led to 95 per cent of mobile phones sold in the country being produced domestically, the star in India’s “Make in India” story is indeed shining.

In fact, India is today the second-largest mobile phone manufacturer in the world after China. “India has achieved tremendous success in mobile phone and component manufacturing in the last four years with more than 95 per cent of domestic consumption now being produced in India,” Pankaj Mohindroo, Chairman, India Cellular and Electronics Association (ICEA), told IANS.

“Our domestic market viz-a-viz domestic manufacturing is saturated and we have set our sights on a target of Rs 7.7 lakh crore of exports by 2025,” he added. According to a survey conducted by mobile industry body ICEA, the 268 mobile handset and accessories manufacturing units employ about 6.7 lakh people.

Mobile manufacturer
In India, 268 mobile handset and accessories manufacturing units employ about 6.7 lakh people. Pixabay

So today the phones that most Indians hold in their hands are made in India, thanks mainly to schemes such as Modified Special Incentive Package Scheme (M-SIPS) to provide financial incentives across the ESDM value chain to compensate for cost disability in manufacturing and Electronics Manufacturing Clusters (EMC).

Launched in 2012, the M-SIPS, provides capital subsidy of 25 per cent for electronics industry located in non-SEZ (Special Economic Zone) areas and 20 per cent for those in SEZ areas.

The Electronics Manufacturing Clusters (EMC) scheme, which was also launched in 2012, encouraged entities, including state governments, to provide good quality infrastructure within a cluster.

mobile manufacturer
Uttar Pradesh has emerged as the new hub of mobile manufacturing in the country over the past few years. Pixabay

Under the scheme, 50 per cent of the project cost for Greenfield Electronics Manufacturing Clusters and 75 per cent for Brownfield Electronics Manufacturing Clusters is given as grant. Due to the focus on “Make in India” and “Digital India” programmes, Uttar Pradesh has emerged as the new hub of mobile manufacturing in the country over the past few years.

In July 2018, Samsung launched the world’s largest mobile factory in Noida. The new facility was set up with the aim of doubling its capacity for mobile phones in Noida from 68 million units a year to 120 million units a year, in a phase-wise expansion to be completed by 2020.

Besides Samsung, most Chinese smartphone makers which now dominate the Indian market – Xiaomi, Oppo and Vivo — also produce their phones in the country. Apple has already started the assembling of iPhone 7 at its supplier Wistron’s facility in Bengaluru. Production of cellular mobile handsets in volume terms reached 225 million units in 2017-18, as compared to production of 60 million units in 2014-15.

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The National Policy on Electronics 2019 has set the aim of promoting domestic manufacturing and export in the entire value-chain of ESDM (Electronics System Design and Manufacturing) for economic development to achieve a turnover of Rs 26 lakh crore by 2025. This will include targeted production of one billion mobile handsets by 2025, valued at Rs 13 lakh crore, including 600 million mobile handsets valued at Rs 7 lakh crore for export.

India currently has over 450 million smartphone users. The number of smartphone users in the country is expected to reach 859 million by 2022, according to an ASSOCHAM-PwC joint study. (IANS)

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Canyon Buys Tata International DLT, DLTM for Rs 305 cr

The total deal value of both the transactions put together is Rs 305 crore, subject to adjustment of actual debt in DLTM

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rat

Tata International Limited and Dutch Lanka Trailer Manufacturers(DLTM) have executed definitive documents to sell their 50-50 joint venture Tata International DLT Pvt Ltd (DLT) to Canyon Point Investment Holdings.

Singhi Advisors said in a parallel transaction TRF Limited, through its affiliate, has also executed definitive documents to sell its 100 per cent stake in DLTM to Canyon Point. TRF Limted is a part of the Tata Group of Companies.

Singhi Advisors acted as the sole advisor to Tata International and TRF for these divestments.

Ratan Tata.

The total deal value of both the transactions put together is Rs 305 crore, subject to adjustment of actual debt in DLTM, the company said in a statement to exchanges late Friday evening.

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Tata DLT’s product portfolio comprises of a wide range of trailers, semi-trailers, tippers and vehicle carriers. DLTM, together with its subsidiaries, designs and manufactures trailers and semi-trailers for transport and logistic applications. (IANS)

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