Also in the letter:
■ YouTube public interest ad sparks outcry; MoS IT clarifies
■ Infosys wins $454 million deal from Danske Bank
■ Smartphone makers urge government to cut input tariffs
Growing wearables production in India bleeds China units
Wearables manufacturing in the country is going from strength to strength, in a big boost for the government’s ‘Make in India’ initiative. And this is proving fatal for businesses in China, which have seen their order books shrink.
Move to India: Top wearables brands such as Boat and Gizmore are making most products, including in the key audio and smartwatch categories, through local electronics contract manufacturers such as Dixon Technologies and Optiemus Electronics, senior officials told ET.
Sameer Mehta, chief executive of Boat, said that almost 75% of the company’s audio products and around 95% of its smartwatches are being made in India, a huge jump from 20-25% of its annual volumes from last year. The capacities of Chinese factories that the company worked with have been slashed to 50%.
Sanjay Kalirona, chief executive at Noida-based Gizmore, had a similar story to tell. “Because wearables assembly as a whole has shifted from China to India, most factories (in China) that were assembling truly wireless earbuds, neck bands and smartwatches are sitting without orders.”
China hit: Two wearables manufacturing executives told ET on condition of anonymity that the dependence on Chinese factories was declining month on month. They said the fall in manufacturing has largely affected small and medium wearables manufacturers, which are mostly based out of Shenzhen in China.
Fully local? Not yet: Companies may be largely manufacturing in India now, but they are still heavily reliant on China for components.
Positive outlook for wearables: Top market research firms have bumped up forecasts for India’s wearable device shipments in 2024, citing falling average selling prices, exponential demand from new-generation consumers, and boost in local manufacturing.
The research firm said that 73.9% of the sales of wearables are from online channels. That said, the top wearable brands are now looking to tap into the offline segment for their next phase of growth.
Ideaforge IPO fully subscribed within hours on robust retail demand
(L-R) Rahul Singh, VP engineering, Ankit Mehta, CEO & Vipul Joshi, CFO, Ideaforge
Drone-maker Ideaforge Technology’s IPO soared off to a good start on day 1, with the issue fully subscribed 3.6 times on the back of strong retail demand.
Tell me more: Retail investors gave the offer a thumbs-up with the category seeing 12.48 times subscription. The non-institutional portion was subscribed 5.13 times.
Latest fundraise: Ideaforge raised about Rs 60 crore in a pre-IPO round earlier this month. Institutional investors Tata AIG General Insurance, 360 One Asset Management, Motilal Oswal Mutual Fund, and Think Investments PCC participated.
Also read | Ideaforge IPO expected to fuel drone startup’s flight
About Ideaforge: Ideaforge, among the first entrants into India’s UAV market, offers its customers applications for surveillance, mapping, and surveying. It is a leader in the Indian unmanned aircraft systems (UAS) market, with a market share of 50% in FY22.
The Mumbai-based firm is backed by investors, including Infosys, Qualcomm, Celesta, Florintree, Exim Bank, Indusage Technology Venture Fund and Infina Finance.
Ideaforge’s journey: The startup was founded by IIT Bombay graduates Ankit Mehta, Rahul Singh and Ashish Bhat in 2007. Their first drone prototype was seen in the Aamir Khan-starrer 3 Idiots, in 2009. The company then launched its first fully autonomous micro unmanned aerial vehicle (UAV) later that year, with a quadrotor configuration. By 2014, Ideaforge had already delivered 70 drones to government agencies, and in 2016, it got $1.5 million in funding, from Infosys and other investors.
YouTube ad with government logos draws internet ire
Minister of State for Information Technology, Rajeev Chandrasekhar
Reacting to an outcry on social media, Minister of State for Electronics & IT, Rajeev Chandrasekhar sought careful use of government logos. Earlier, Twitter users had raised concerns over the government endorsing certain individuals — such as investment advisors — as experts on the internet.
What’s the issue? A public interest campaign issued by YouTube, depicting a popular social media personality who offers stock market courses, has drawn flak from social media users.
Featuring the logos of the IT ministry and India’s G20 presidency, the body copy stated, “There are real as well as fake experts on the internet. Spotting the difference between the two can be tricky. So, before you trust any self-proclaimed expert, know a little more about them”.
The ad drew questions on whether YouTube and MeitY endorsed “trusted” experts.
‘Not an endorsement’: “Just to be very clear – this is not an endorsement of any person or any social media platform,” Chandrasekhar tweeted. “Given that these type of advocacy ads cud be misintepreted, i hv advised more careful use of Govt logos in these campaigns by private platforms,” the minister of state for IT added.
This comes at a time when markets regulator Securities and Exchange Board of India (SEBI) has red-flagged unregistered social media influencers for offering financial and investment advice to their followers.
Transparency in peril: Another tweet by the founding director of NGO Internet Freedom Foundation has sparked conversations around the need for ‘paid partnership’ disclosures.
Apar Gupta, founding director, Internet Freedom Foundation, an advocacy group said that recently interviews have gone up on YouTube of several cabinet ministers in the Union Government. “This piqued my interest and I found that in the description, the phrase, “Co-presented to you by @MyGovIndia.. Are audiences properly informed with existing disclosures that such interactions are not press interviews but paid promotions?” he questioned.
Infosys wins $454 million digital transformation deal from Danske Bank
Danish multinational banking and financial services corporation Danske Bank has tapped Indian IT major Infosys to further its digital transformation objectives in a $454 million deal.
Details: Infosys will take over the bank’s IT centre in Bengaluru for 13.6 million Danish Krone (or Rs 16.3 crore) as a part of the deal. This marks the first such acquisition of a global capability centre (GCC) since the Silicon Valley Bank crisis earlier this year.
The deal, which can be extended for three more years, will help Danske Bank better its customer experiences and technology modernisation, according to a statement.
Taking Danske digital: In a release, Infosys chief executive Salil Parekh said, “Infosys will collaborate with Danske Bank to strengthen their core business with greater digital, cloud and data capabilities. This will help Danske Bank create more value for their customers using powerful advances in Al, including generative Al.”
Quick recap: This is the latest in a string of similar IT deals. Last month, Infosys won a $1.5 billion deal from global energy giant BP for a five-year period. ET reported last week that TCS had bagged a $1.9 billion deal from UK workplace pension provider NEST to digitally transform its scheme administration services.
Indian smartphone makers urge government to cut input tariffs
Smartphone makers in India are urging the government to free the manufacturing industry from the scourge of excessive input tariffs, so that India doesn’t fall behind countries such as China and Vietnam.
Tell me more: The India Cellular and Electronics Association (ICEA) stated that high input tariffs are “completely incompatible with India’s export ambitions and put us at a massive disadvantage with countries like China, Vietnam, Mexico and Thailand”.
The industry body submitted a request for rationalisation and reduction of input tariffs to the finance ministry earlier this month.
Tariff talk: Electronics firms lament that India has one of the most complex and cumbersome tariff regimes, with rates of 2.5%, 5%, 10%, 15% and 20%, as well as a variety of surcharges. The ICEA has called this excessive, said it causes confusion, and called for it to be scrapped.
Other demands: “Given the scale of electronics trade, which is close to $100 billion, we request that a senior level panel of two officials, one each from the ministry of finance and Meity, be created to regularly provide accurate tariff classification for imports,” the body stated. “The decisions will help deliver both competitiveness and predictability, key demands of global supply chains and Indian champions alike,” it added.
Today’s ETtech Top 5 newsletter was curated by Megha Mishra in Mumbai and Vaibhavi Khanwalkar in Bengaluru. Graphics and illustrations by Rahul Awasthi.
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