Insurmountable Roadblocks

India has gone through an Industrial Revolution earliuer and is presently witnessing a ‘Digital Revolution’ through Prime Minister Narendra Modi’s Digital India Campaign, that is expected to lead the world and make it IT-empowered and leader in healthcare, according to Ravi Shankar Prasad, Union Minister for Electronics and Information Technology, while focusing on India’s medical electronics market growing to $11.7 billion by 2017.

“We don’t even manufacture needles used by dentists in India, which are instead imported along with other products used in healthcare. India has outstanding teachers, researchers and I want CEOs of companies to partner with IITs and other institutions. The Government will facilitate this,” he said at the Medical Electronics Innovation Summit 2016 in Mumbai recently. 

To a question about red tape and bureaucratic hurdles hampering business startups, Prasad told Millennium Post that India’s single window system for ease of doing business and required clearances was working well and which could be seen in the fact that India’s global rating had come down from 142 to 130 in barely two years.

The Minister later oversaw the signing of an MOU between SAMEER (Society for Applied Electronics Engineering and Research) and Government of Andhra Pradesh for conducting a joint and comprehensive assessment of health technologies including Dual Energy Linear Accelerator for cancer care development.

“Medical devices are increasingly becoming medical electronics with even commonly-used medical devices like thermometers, stethoscopes, blood pressure instruments to high-end devices all becoming electronic,” he said while noting that “the estimated demand for medical electronics devices was around $1 billion in 2012 and our global share is only two per cent with the future seeing greater demand for medical electronics in India due to: Greater awareness and increasing incomes leading to demand for new hospitals and number of beds, doctors and nurses; Increasing use of technology (Telemedicine, Personal devices, Mobile-based technologies, Imaging, Interventional); Imaging, Cardiology equipment restricted to larger hospitals; Government programmes like NRHM providing technology at grassroots.”

“The Government provides financial incentives for medical electronics devices alongside the development of IT and telecom equipment. As a result, incentives like Modified SIPS, Electronic Manufacturing Clusters, EDF are available for the units investing in medical electronics devices. A major step by our Government was allowing 100 per cent FDI through automatic route for the manufacture of medical devices as early as January 2015.  As a result of the incentives being offered by Government, several domestic and multinational companies have started their manufacturing activities in the country.

We have received seven proposals involving Rs 754 crore under MSIPS for medical electronics, but this sector require more efforts when compared to overall investment attracted under electronics manufacturing in other sectors like mobile manufacturing, LED, consumer electronics etc,” he said. 

Highlighting ‘Make in India,’ he urged companies to take advantage of the MEIS scheme incentives to export locally-made medical devices – and also asked the Health Sector Skills Council to take advantage of this scheme for developing skilled manpower in the area of advanced medical electronics devices. 

Noting that present penetration of medical devices in India is very low, the government encourages businesses, R&D institutions and academia to use innovation and new technology to bring down costs of technology and make it more accessible, he said, adding that  Start Up India is one such programme encouraging innovation. 

Meanwhile, Ajman emirate of the UAE is wooing India’s business community for being of strategic importance to the UAE and Indian companies including startups are being encouraged to open new office offices and business in the emirate of Ajman’s Free Zone at low cost, 100 per cent foreign ownership, repatriation of capital and profits, no corporate tax or income tax or import duties on goods for export, besides single window clearances and cheap energy for offshore companies.

“With India emerging as growing economic and political powerhouse and influence globally alongside the Indian Diaspora being one of the largest contributing business community in Ajman’s success, we are further strengthening this privileged business bond through facilitating business activity by providing a pro-business milieu for foreign investment,” Mahmood Al Hashemi, General Manager, Ajman Free Zone, said here on Saturday while noting that the liberal economic climate of Ajman  has been specifically designed to welcome foreign businesses and investments, encourage production, incentive provision for trade, develop international trade and promote industrial activity.

“India, for the past 25 years, has been one of the top three trading partners of the UAE with 40 per cent ownership of the present 17,000 companies registered in the Ajman Free Zone,” Al  Hashemi pointed out as the leader of an Ajman Free Zone delegation holding roadshows in Mumbai, Delhi and Chennai.

“Indian businesses in Ajman are growing y-o-y at 15 per cent to 18 per cent annually and that is why we have opened two offices in Mumbai and Delhi. Even as India is encouraging startups, we are offering startups in Ajman Free Zone at barely $3,300 plus instalment facility, where others charge over $10,000 or more. However, there is no investment ‘cap’ and startups can bring whatever amount they need for their businesses.”

Highlighting the forthcoming Expo 2020 in the Middle East, he said the Ajman Government will be signing an MOU with The EXPO 2020 as sponsors to enable benefits of startups, hospitality and tourism during that event. Ajman is also building a special 43-storey ‘Tower’ for housing business offices at a cost of Dhs 280 million with completion set for before EXPO 2020 since this EXPO is expected to attract a lot of FDI into Ajman, he said, adding “We are issuing licences in barely 24 hours. As a result, lots of businesses are moving the base from elsewhere into Ajman.”

“Ajman is also focusing on another Free zone called “Al Zorah” that will cover property sales, real estate and where a golf course has been set up in December 2015 – all under our umbrella,” he added. 

Make in India witnessed Japan’s Fujifilm uniquely launching its first India-made startup product – manufactured in Pune in India – through its first “Made in India, Made for India” production of a Wide Format Eco Solvent Printer that targets the indoor/outdoor signage and branding applications market. 

“The Indian Government is highlighting ‘Make in India’ and hence we focused on this India-made, India market effort, which we will later expand to exporting to other countries including the Middle East,” Yasunobu Nishiyama, Managing Director, Fujifilm India Pvt Ltd said while pointing out that the company aimed to strengthen its presence in the Indian Graphics Art segment with a 15 per cent overall growth in FY 2016.

Cheap Chinese imports provided no competition to top brands including Fujifilm – which had even developed its own non-hazardous, ROHS-compliant degradable ink for such printers. 

“Cheap imports lead to costly inks, warranty going for a toss in machine failures and downtime. The current printer specifications are made for India but will be okayed later in the next Phase for exports to the Middle East and Africa through suitable materials made for local conditions. 

The R&D took us one year from idea conception to product delivery and We are eyeing 200 units India sales annually at Rs 9,99,999 each,” he said, adding “India has the capability of design and development and this product proves it. Indian customers are not just price-conscious but also value-conscious and not averse to paying a good price for a good product.” 

The pen is mightier than the sword, as the saying goes,  and this has proved true today even as pens, in all shapes, sizes and prices successfully compete with technology like computers to contribute to India’s literacy through writing use in schools, colleges and other institutions. One company – Flair – is making history through pens in its golden jubilee plans for further expansion in African countries from its Kenya base to meet demands of that continent.

“With Rs 500 crores turnover today and daily production of 50 lakh plastic pens and one lakh metal pens  to meet our  7 per cent to 8 per cent growth in India itself, besides exporting to 75 countries globally pens priced between Rs 5 and Rs 5,000, our golden jubilee year 2016 has seen us signing Bollywood superstar Hrithik Roshan to endorse Flair pens as our product starred in his alien thriller movie Krish (as a pen that could save the world), besides our writometer pen being used in Salman Khan’s film Sultan,” Mohit Rathod, Director, Flair Pens Ltd said, adding “We have also launched Superman and Tom-n-Jerry pens for kids in the back-to-school season, besides plans to launch pens with many unique features.”

“Unlike Calligraphy which is fading away to a few countries like Japan, China and Korea, Art – using colour pens – is a growing trend that is in demand these days and part of our visionary focus. Besides, our offshore Kenya unit is producing 50,000 pens daily to meet demands of the growing African market.”

However, though the pen may be mightier than the sword, it is certainly not stronger than the tax-man. “India consumes about 900 crore pens yearly, while manufacturers earn barely Rs 3 to Rs 3.50 per pen. 

There is no tax relief for the pen industry in India over past 25 years  – where present taxes are 5 per cent nationally though Tamil Nadu is the only state not taxing our industry – which needs to be looked into by the Government to help us,” said Rathod, while pointing out that the pen industry has no Association to look into this matter.

“With a growing 125-crore Indian population, a ‘pen in each pocket’ is still a distant dream though accelerating literacy rate and modern day living makes pen usage a necessity for even the poorest of poor Indians. The GST is a much-awaited tax and we all look forward to the new regime as standardisation of taxation has its own advantages. 

We want Government to keep all pens –costing below Rs 30 – exempt from tax.”

The small-scale unbranded pens sector accounts for around Rs 550 crores in sales, even as domestic consumption of various brands grows annually at 18 per cent in quantity and 10 per cent in value in India. However, 40 per cent pens are retailed at barely five rupees, while premium segment pens (above Rs 100) form just one per cent of the market). The growth of mobile phones, tablets have not affected pen sales, while the rising US dollar has stalled cheap Chinese imports.

The pen industry is in a consolidation phase with manufacturers leasing their production capacities to brands, besides active negotiations underway for brand consolidation and takeover by Indian and international brands – while weak brand faces being ‘gobbled” up or fading away. 

At present, the Indian writing instruments industry had an estimated turnover of about Rs 4600 crores (FY 2015-16), with expected growth of 8 per cent to 10 per cent per annum. Indian pen exports were around $ 220 million in 2015-2016 with the USA and South American countries being primary markets, and are fast replacing Chinese pens in the Middle East and African countries due to quality. 

Meanwhile, Government Mini-Ratna company – Rashtriya Chemicals and Fertilizers Limited (RCF) – is eyeing a startup in  Iran, even as it shook off a second weak year of monsoons and poor agro-climatic conditions to emerge profitable with 12.5 per cent growth, besides being supported by urea imports falling by 3 per cent y-o-y to 8.47 MT in fiscal 2016, which helped lower the import bill further in financial year 2017.

The domestic fertiliser industry revenues posted a modest growth of 5 per cent to Rs 820.9 billion in fiscal 2016 from Rs 79.4 billion, even as profit margins remained under pressure due to a high reliance on working capital borrowings to fund subsidy receivable and reduction of preset energy norms under NUP 2015, said RCF CMD Manoj Mishra.

In line with its philosophy of promoting sustainable agriculture, the Indian Government has mandated 100 per cent production of neem-coated urea, which ensures a slow release of nitrogen resulting in lower usage of urea, preventing leaching of soil nutrient and hindering diversion of urea for non-agricultural uses. 

The Government is eyeing various options for availability of urea capacity at the lowest cost, including setting up an ammonia/urea project at Chhabahar in Iran by using natural gas as feedstock with estimated $903 million and the product being shipped back to India.

A consortium comprising RCF and Gujarat State Fertilisers Corporation (51 per cent joint equity) will partner with Iran’s Faradast Energy Falat Company (49 per cent equity) in this regard, Mishra said, adding that another project – the Rs 8,000 crore fertiliser complex comprising 2200 MTPD ammonia plant and 3850 MTPD at Talcher in Odisha through coal gasification route – will turn out to be a ‘game-changer’ for India. 

To a question, he told Millennium Post that RCF is exploring possibilities of tie-ups for setting up potassic and phosphatic plants in various countries including those where it has its suppliers.special 43-storey ‘Tower’ for housing business offices at a cost of Dhs 280 million with completion set for before EXPO 2020, since this EXPO is expected to attract a lot of FDI into Ajman, he said, adding “We are issuing licences in barely 24 hours. As a result, lots of businesses are moving base from elsewhere into Ajman.” “Ajman is also focusing on another Free zone called “Al Zorah”.