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Business Standard
01-08-2025
- Business
- Business Standard
Andhra unveils ₹4,600 cr policy to boost electronic component manufacturing
The government of Andhra Pradesh on Friday cleared a dedicated Electronics Component Manufacturing Policy, with incentives totalling around Rs 4,600 crore for manufacturers. This move is expected to help the state achieve an overall target of $100 billion in investments within the electronics ecosystem, according to a government source. The state plans to develop areas like Sri City, Hindupur, and Kopparthy as strategic hubs for electronic component manufacturing. As a special incentive, the policy includes an early bird incentive for the first ten projects, requiring a minimum committed investment of Rs 250 crore over five years. This includes a capital subsidy of up to 50 per cent of the investment, paid in two equal annual instalments. Additional incentives include land offered at a 75 per cent discounted price. This policy follows the launch of the Central government's Electronics Components Manufacturing Scheme (ECMS) four months ago, which offers incentives of around Rs 22,919 crore. The Ministry of Electronics and Information Technology has reportedly received around 100 applications from Indian and international companies to set up units under the ECMS. Additionally, the Andhra Pradesh government will provide a 100 per cent subsidy matching the amount approved and released by the Central government under the ECMS. This subsidy will be disbursed within six months of the Centre releasing the corresponding incentive under ECMS, in the applicable proportion. However, firms receiving the early bird incentive are not eligible for this subsidy. 'The move is expected to benefit companies like Syrma SGS and Daikin Industries, which have already committed significant investments in the state,' said a government source. 'A key beneficiary will be Syrma SGS, which is applying for incentives to set up India's largest PCB plant and copper-clad laminate factory with an investment of Rs 1,800 crore. This project will be established in partnership with South Korean firm Shinhyup Electronics, which will bring technological expertise to the venture,' he added. Other incentives include a 100 per cent exemption on electricity duty for six years from the notification of the policy, along with reimbursement of power costs, SGST, and stamp duty. Recruitment assistance will also be provided, as per the Andhra Pradesh Electronics Policy 4.0. The state is looking to attract investors at a time when India's electronics production has reportedly doubled over the last six years to $115 billion, driven by global majors like Apple and Samsung. Since Nara Chandrababu Naidu took charge in 2024, Andhra Pradesh has attracted a series of electronics sector investments, including LG Electronics India's Rs 5,000 crore unit, Daikin Industries' Rs 2,475 crore additional investment, Carrier Global's Rs 1,000 crore unit, Wingtech Mobile Communications' Rs 1,061 crore investment, and Sensorem Photonics India's Rs 9,246 crore expansion plans. According to sources, a major factor behind this investor interest is the attractive policy framework for the electronics segment, semiconductors, and display fabs, among others.
Time of India
30-07-2025
- Business
- Time of India
Indian contract manufacturers go global: Firms tap tariff-led supply gaps; analysts flag ROI risks
AI-generated image Indian electronic contract manufacturers are expanding globally through acquisitions and strategic partnerships to gain access to clients in the US, Europe, and other international markets. They are capitalising on supply chain disruptions triggered by tariff-related shifts, particularly those involving China. These companies are leveraging the current trade environment to acquire technologies and capabilities that would otherwise take years to develop internally. Their strategy aligns with the Indian government's push to strengthen domestic electronics manufacturing and increase exports. 'Given the small window of opportunity, companies are taking the shortcut route of acquisitions to tap into clients looking to establish alternative supply chains beyond China. The idea is that you can sell not only what the target entity is selling, but also your own expertise and products,' a senior executive from a contract manufacturing firm told ET. Firms including Kaynes, Dixon Technologies, Syrma SGS, Cyient, and Amber Group are actively pursuing overseas deals to enhance their technological strength and global market presence. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like The Most Beautiful Women In The World Undo Amber Group, which specialises in consumer durables and electronics, is investing over Rs 400 crore to acquire a controlling stake in Israel-based Unitronics, an industrial automation company. At the same time, Calcom Vision is setting up an export-focused division. 'Amber's acquisition is driven by the need to cater to aerospace and defence globally, which requires specific certifications. Acquiring a company that already possesses these certifications is crucial for Indian players tapping into global markets, as obtaining them independently is challenging and time-consuming,' said an industry analyst, requesting anonymity. The deal gives Amber Group access to defence-sector clients in the US and Europe- both regions seeing increased defence spending amid ongoing conflicts in Ukraine and Gaza. Dixon Technologies, meanwhile, has formed joint ventures with several Chinese component manufacturers to gain access to technology, with total investments exceeding Rs 1,000 crore in equity and capacity expansion. Kaynes and Syrma SGS have partnered with Korean firms to enter the printed circuit board (PCB) segment. Both have also acquired stakes in companies in the US, Austria, and Germany to tap into their existing customer networks. Syrma SGS reported Rs 232 crore in industrial component exports during the June quarter, marking a 29 percent sequential rise. 'Exports, we are primarily doing to Western Europe and the USA. The tariff uncertainty is definitely holding back customers from receiving large orders. Hopefully, within this quarter, this uncertainty will be a thing of the past,' Syrma SGS managing director Jasbir Gujral said during a recent earnings call. Calcom, which manufactures LED lighting and ceiling fans, is relaunching its export division in response to rising demand for diversified supply chains, according to executive director Abhishek Malik. 'The tariff wars are the trigger for us to re-enter the export business after the pandemic. Two US companies have already audited us and our products are currently undergoing testing. We expect to hear from them by the end of the month,' Malik said, as quoted by ET. India currently faces tariffs of 10–15 percent on lighting exports to the US under deferred reciprocal duties, while Washington's stance on tariffs on Chinese goods remains uncertain. Should the balance tilt in India's favour, Malik anticipates significant interest from US brands, especially in lighting and fan categories. However, analysts warn that the ongoing wave of acquisitions could raise concerns among investors about capital allocation and delayed returns. 'Investors could be worried that money is constantly being reinvested into the market in the form of new investments and acquisitions, but they are not seeing peak asset turns. Returns are being deferred, meaning investors have to wait longer to realise their profits,' an analyst said, as quoted by ET. Stay informed with the latest business news, updates on bank holidays and public holidays . Discover stories of India's leading eco-innovators at Ecopreneur Honours 2025
Time of India
29-07-2025
- Business
- Time of India
Electronics makers shop for cos to tap western clients
Indian contract manufacturers of electronics goods are acquiring or partnering with companies globally to get access to their clients in the US, Europe and other markets, trying to tap into the opportunity from the tariff turmoil that has triggered a search for alternative supply chains . They are also using this opportunity to acquire new technologies and capabilities, which would otherwise take years to develop in-house even as there is uncertainty over how long India's tariff advantages will last amid intense trade talks among countries. The development aligns with the government's push for self-sufficiency in electronics manufacturing and increasing exports from India . Explore courses from Top Institutes in Please select course: Select a Course Category "Given the small window of opportunity, companies are taking the shortcut route of acquisitions to tap into clients looking to establish alternative supply chains beyond China. The idea is that you can sell not only what the target entity is selling, but also your own expertise and products," a top executive from a contract manufacturing firm told ET. Companies like Kaynes , Dixon Technologies , Syrma SGS, Cyient , and Amber are actively acquiring and partnering with companies to access new technologies and tap into the global market. Live Events Consumer durables and electronics maker Amber Group is spending more than ₹400 crore to acquire a controlling stake in Israel-based industrial automation company Unitronics. Calcom Vision is setting up a unit to steer exports. "Amber's acquisition is driven by the need to cater to aerospace and defence globally, which requires specific certifications. Acquiring a company that already possesses these certifications is crucial for Indian players tapping into global markets, as obtaining them independently is challenging and time-consuming," said an industry analyst, who did not wish to be named. The acquisition provides the Amber Group with access to US and European clients in the defence industry, which is experiencing significant traction since the Ukraine and Gaza conflicts, he said. Dixon has formed joint ventures with several Chinese component makers to acquire technology, investing over ₹1,000 crore in equity and capacity-building. Kaynes and Syrma SGS have partnered with Korean companies to enter the PCB segment. They have also acquired stakes in US, Austrian and German companies to get access to their global clients. Kaynes and Cyient did not respond to emails seeking comment, while the Amber Group declined to comment. Syrma SGS posted a 29% sequential increase in exports of industrial components during the June quarter at ₹232 crore. "Exports, we are primarily doing to Western Europe and the tariff uncertainty is definitely holding back customers from receiving large orders. Hopefully, within this quarter, this uncertainty will be a thing of the past," Syrma SGS managing director Jasbir Gujral said during a recent earnings call. LED lighting and ceiling fan maker Calcom is setting up a unit to steer exports amid rising demand for alternative supply chains, executive director Abhishek Malik said. "The tariff wars are the trigger for us to re-enter the export business after the pandemic. Two US companies have already audited us and our products are currently undergoing testing. We expect to hear from them by the end of the month," Malik said. India currently faces a 10-15% tariff for lighting products exported to the US under the deferred reciprocal tariffs, while Washington's tariffs on China are unclear right now. If the tariffs work in India's favour, Malik sees a bulk of US brands working with Indian manufacturers, especially in lighting and fans. However, analysts warned that multiple acquisitions present concerns for investors regarding frivolous allocation of capital and returns. "Investors could be worried that money is constantly being reinvested into the market in the form of new investments and acquisitions, but they are not seeing peak asset turns. Returns are being deferred, meaning investors have to wait longer to realise their profits," an analyst said.
Business Upturn
28-07-2025
- Business
- Business Upturn
This EMS company's stock has surged over 30% in just 1 month following a brokerage upgrade and MF raising stake
Shares of EMS (electronics manufacturing services) player Syrma SGS Technology have surged nearly 33% in the last one month, hitting a fresh record high of ₹745 on Monday, supported by multiple catalysts including increased institutional interest and a bullish outlook from a leading global brokerage. One of the key triggers has been a stake hike by Franklin Templeton Mutual Fund, which raised its holding in Syrma SGS across various schemes to 5.069% of the total paid-up equity share capital, crossing the critical 5% regulatory disclosure threshold. The fund house acquired 1,67,780 equity shares through open market transactions, increasing its holding from 4.975% earlier. Meanwhile, JP Morgan initiated coverage on Syrma SGS Technology on July 9 with an 'Overweight' rating, citing the company as a high-conviction play in India's rapidly growing EMS space. The brokerage has projected a 31% compound annual growth rate (CAGR) in sales between FY25 and FY28, backed by strong demand in industrial and automotive segments and improving profitability metrics. According to JP Morgan, Syrma's EBITDA margins are expected to expand by 70 basis points to 9% by FY28. This is seen as a result of easing margin pressures in the consumer electronics vertical, robust order inflows from key end-user industries, and operating leverage benefits. The brokerage also pointed to a likely recovery in exports from FY27, a factor it believes is underappreciated by the market and may lead to potential earnings upgrades in the coming years. JP Morgan, in a broader note on the sector, dubbed India's EMS industry a 'sunrise sector', predicting a 32% revenue CAGR over FY25–30, driven by the 'Make in India' policy push, rising electronic content across devices, and the global China+1 supply chain diversification strategy. The recent upmove in Syrma SGS's stock reflects a broader re-rating of high-growth domestic manufacturing plays. With both mutual fund interest and foreign brokerage support, the stock has outperformed the broader market and remains in focus as investors look for structural growth stories in India's electronics and tech manufacturing ecosystem. Ahmedabad Plane Crash
Mint
24-07-2025
- Business
- Mint
Spanner in the works: How worker attrition is threatening India's manufacturing ambitions
Bengaluru: Nitasha Agarwal is a different kind of headhunter. In May, she trekked to a small village in the hills of Meghalaya in search of factory workers for an electronics manufacturer in Bengaluru. Armed with YouTube videos, case studies, and stories of successful migration, she organized a camp in Mawlynnong's panchayat office. Over the next few hours, she pitched factory employment as an escape from low-paying tea garden jobs. 'Some of these women have never even travelled outside their villages. We had to convince their parents," she said. 'They asked me chawal milega ki nahi; non-veg milega?" She answered hundreds of questions from curious village elders, parents, and applicants regarding salaries, safety, work profile, travel, food, and accommodation. Ultimately, she was able to recruit 70 young women. Her job is a tough one. Scarcity of labourers in industrial towns has led her to travel to remote locations to find foot soldiers for the factories that power India's manufacturing ambition. Her company, staffing firm Quess Corp., organizes, on average, 400 such camps across villages in India every year with the help of state and district-level officials. Local governments are keen to find employment for the youth. However, convincing parents and potential workers is only the beginning of the story to power India's mission to transition young workers from unproductive farm jobs to better-paying factory jobs. A long road In classical economics, land, labour, and capital are the key inputs for production. While governments have splurged on subsidies to attract capital and promised land to big-ticket projects, labour remains the weakest link. Despite more than half of India's population being under the age of 25, manufacturers are struggling to build a reliable pipeline of labour to power their 'China+1" ambitions in India. 'China + 1" is a manufacturing strategy adopted by multinational companies looking to de-risk their supply chains. Long-distance migration is not easy, especially if it involves moving from an informal and flexible work environment to the strict discipline of factories. Attrition is alarmingly high, with over half of contract workers leaving within a year, according to staffing firm Teamlease; about a tenth of labourers drop off within the first three months of joining, it added. 'Attrition is very high in the first 60-90 days," confirmed Jasbir Singh Gujral, managing director of Syrma SGS, an electronics manufacturer. 'The worker wakes up in a house where there may or may not be electricity and running water. He comes from chaos to the factory gates, where everything is organized. The first 10-15 days, he may not be able to adhere to protocol." Gujral has made peace with factoring in high early attrition and absenteeism in his overall cost structure. 'These people are on ₹18,000-20,000 salaries, so they will leave even if they get ₹1,000 extra. That is their monthly milk expense," he said. 'My parents were not allowing me to leave home and work in a factory. I am their only son, and they want me to be near them. They have told me to come back if I am not comfortable," said 19-year-old Bishnucharan Behera, who recently travelled 2,000 kilometres from Cuttack in Odisha to work in Hosur, an industrial town in Tamil Nadu. India had about 68.5 million manufacturing jobs in 2022-23, according to household survey estimates analyzed by Data For India, but nearly four times as many people still work in low-productivity farm jobs. When Chuhao Chen, human resources head for Taiwanese firm Delta Electronics' Indian region, came to the country about two years ago, he was in for a surprise: the work culture, hiring, attrition, and absenteeism all proved challenging. 'Transitioning from farm to factory is a long and challenging journey, especially since manufacturing hasn't traditionally been popular in India," said Chen. 'If the process has five steps, they'll do steps one and five, skipping two, three, and four, thinking the final result looks fine." Chen is working on changing the work culture of Delta's labourers, but is mindful that importing the Taiwanese and Chinese work model as is may do more harm than good. After joining Delta, he worked on teaching labourers what 'meaningful contribution" looks like while simultaneously educating managers from China and Taiwan to tone down their 'very pushy or strict" management style. Human resources teams at Zetwerk, another manufacturer, start from the basics in the training programme—hygiene, mealtime routines, and washroom breaks—for fresh recruits in its electronics factories. They then move on to teaching the Japanese philosophy of 5S, a workplace organization and management methodology focused on creating a clean, efficient, and organized work environment. 'The learning curve is sharp," acknowledges Josh Foulger, president of Zetwerk's electronics business. He has been watching the labour migration and transition for over two decades now. Foulger was previously with Taiwanese contract manufacturer Foxconn and was involved in scaling up its Indian operations. 'India, as a culture, is not naturally a 5S country," he told Mint. Skills and scale Creating a competent manufacturing workforce is the country's biggest challenge if it wants to rival China. Less than 5% of India's young workforce, aged 15-29 years, has undergone formal vocational training, according to the PLFS data released for the year ended June 2024. Just 28% and 34% of polytechnic and industrial institute graduates, respectively, were employable in 2023, according to Morgan Stanley. Sahil Ahmed, owner of a small abrasives factory in Udaipur, wakes up every morning to decide which machines to operate depending on the number of people who show up for work. He has three hydraulic press machines and five mixing machines in his factory, and runs them depending on the number of people and their skill levels. 'I am never running at full capacity. You know I cannot raise wages to retain workers. What I was selling at ₹850 a piece 12 years ago, I am now selling at ₹350 a piece because of competition from China. The margins are thin," said Ahmed. Ahmed joined his father to run the factory after graduating from IIT-Bombay more than a decade ago. He hopes to broaden his client footprint, but is running behind in the expansion schedule. 'These youth are not used to working in a scientific manner. You can teach them technicalities through training, but you cannot teach tenacity, working diligently, following environmental and safety standards, and not bypassing rules. They cannot tolerate the new environment's pressure," said Lohit Bhatia, president of Quess' workforce management business. India is banking on a manufacturing boom to absorb its vast, underemployed youth population. China rapidly industrialized its economy at the end of the 20th century by mobilizing its workforce from farms to factories. India has struggled to emulate its neighbour. According to the World Bank, India had 44% of its workforce employed in agriculture in 2023, down from 63% in 1991. During the same period, China's workforce on farms came down to 22% from 60%. Delta Electronics has started increasing automation on its assembly lines to reduce dependency on labour and maintain quality standards. 'We can't always rely on consistent human availability. Even though labour costs in India are low, automation helps us meet quality and delivery expectations," Chen said. With millions of young people joining the workforce every year in India, the government is urgently looking to create formal employment and increase workforce participation. Manufacturing jobs pay 30-40% more than agricultural work, on average, according to an analysis of PLFS data by the Foundation for Economic Development, making them critical in increasing welfare at scale. Constant labour troubles may lead to companies adopting more automation, undercutting the government's goal of generating jobs. Indeed, a report by government think tank Niti Aayog last year acknowledged India's 'limited success" in capturing the 'China+1" opportunity. Without addressing labour disillusionment, India risks missing its moment. Where the heart is The reasons for high factory attrition are complex and manifold. Factory owners have heard it all: frustration over long hours, strict factory operating procedures, homesickness, inability to adjust to a new state's cuisine, long commutes, and poor accommodation, especially on the outskirts, where factories are located. Sometimes, workers don't have the money to survive the first month before their salaries hit their bank accounts. Rajesh Mohanty, a 21-year-old electronics diploma holder, left his village in Odisha in June to hunt for a job in Bengaluru. After almost a month staying with nine others in a single room on the outskirts of the tech city, he has managed to find a position in an electric vehicle (EV) manufacturing unit. 'I miss my home food, and my parents keep asking me if I eat enough," he said. Mohanty is not the only migrant who misses his home cuisine; a recruiter recently saw 245 out of 600 workers from Karnataka quit an automobile maker's factory in Gujarat within two months. 'We asked them why, so they said they found the food too sweet!" he said. On top of social isolation and the culture shock of working in factories, the government's free food welfare schemes for 800 million Indians are also making it harder for youth to leave home for newer opportunities, according to economists. The reverse migration from cities to villages seen during the pandemic-era lockdowns hasn't fully corrected itself, they note. 'You don't have to fight for food in the villages, but in the cities, wages are stagnant and savings are poor due to inflation. In leaving the farm, the opportunity cost is much higher—you'd think twice before leaving," said Dhiraj Nim, an economist at ANZ. Housing challenge We need fewer frictions in matching of labour to industry," said Rahul Ahluwalia, founding director at the Foundation for Economic Development, a New Delhi-based think tank. 'Industrial worker housing is an important part of the puzzle—the government needs to allow it in industrial areas and treat it as infrastructure." A Niti Aayog report released last year stated that inadequate housing near industrial hubs is a major bottleneck in India's manufacturing story, leading to high attrition rates, reduced productivity, and workforce instability. It observed that the lack of suitable accommodations is restricting the migration of workers, particularly women, and limiting the manufacturing sector's growth potential. Doozy Robotics, a maker of autonomous robots for other factories, has a small manufacturing unit near Chennai. It sees 60% of employees leaving within a month of joining and high levels of absenteeism, all of which have delayed its plans to scale up production. 'Nobody wants to live on the outskirts of these manufacturing hubs. The infrastructure is poor, there are no schools for their children, and they can't bring their families. There is a mismatch between aspiration and reality," said Ajmal Thahseen, founder, Doozy Robotics. When construction equipment maker Schwing Stetter started a factory on the outskirts of Chennai a few years ago, it struggled to hire and retain local, experienced workers. 'Even existing workers from our old factory didn't want to move to the new factory, so we decided to go pan-India looking for workers. Now, the majority of our workers come from West Bengal, Odisha, and Jharkhand," said V.G. Sakthikumar, the chairman and managing director. Some electronics manufacturers, such as Foxconn, Delta Electronics, and Tata Electronics, are building mega dormitories to house their workers. Meanwhile, Aequs, a maker of aerospace components and kitchen cookware, claims it has a stable workforce because it has set up factories in the heartland of Karnataka. This has helped avoid uprooting labourers from their families while maintaining cultural homogeneity. 'The key strategy for us has been not to be in a tier I city. Metros are crowded, and everyone is fighting for labour. The problem in factory clusters in Hosur and Bengaluru is that everyone is coming from the North to work in them. Companies should go where the labourers are," said Aravind Melligeri, chief executive at Aequs. The Aequs case is a rare instance of factories moving closer to the labour pool than the other way round. Most large factories prefer working in clusters for economies of scale and access to critical road and port infrastructure. An outlay of ₹2,500 crore for industrial housing was announced in the latest budget. According to experts, free or subsidized labour housing may not only reduce the cost of living and commute time, but also address the need to thrive in a community. While most factories are being built in south India, particularly in Tamil Nadu and Karnataka, the labour-surplus states are in north India. The culture mismatch in terms of language and food takes an emotional toll on young workers. Lure of quick money Rather than working in a factory, the lure of city life is making the gig economy, especially quick commerce and ride-hailing jobs, a more attractive bet for young men choosing to leave their villages. Kartik Narayan, chief executive officer, staffing, TeamLease Services, has observed that many young men, especially in the 18–25 age group, who form the bulk of the manufacturing workforce, are opting for flexible gig jobs in cities instead. 'This is a growing issue, especially in metro and tier-I cities. Gig jobs offer faster earnings, more autonomy, and daily payouts, even if the overall salary is lower," he said. Cities such as Delhi, Ahmedabad, and Kolkata recorded over 100% growth in last-mile-delivery related job postings, making them key hubs for gig-based logistics roles. Manufacturers are thus forced to find creative ways to try and retain their workers. At Delta, Chen has managed to reduce the issue of quitting and absenteeism to some extent by linking skilling, retention, and attendance to extra payouts. Zetwerk has announced a Diwali bonus in its new Chennai factory to reduce absenteeism and increase retention. Once Diwali goes by, Foulger plans to announce a new incentive scheme. 'In Tamil Nadu, we celebrate Pongal, so I just need to figure out something for Pongal next," he says, laughing.
