Electronics is the fastest growing manufacturing sector in the world and is primarily driven by the demand for new age consumer electronics. . In India, Karnataka ranks amongst the largest contributors to Electronic Industrial Output and recorded a growth rate of 18% CAGR.

1. Electronic System
Design and
Manufacturing
DEPARTMENT OF IT, BT AND S & T

2. PwC
Foreword
The State Government’s vision is to contribute to
atleast 20% of the country’s total ESDM exports
of $ 80 billion by 2020, generate 2.4 lakh new
jobs, and file 2,000 patents in the same period.
The objective is to make Karnataka the preferred
investment destination in the electronic
manufacturing sectors of Communication,
Defense, Automotive and Consumer products
among others. The focus will be on building an
ecosystem fostering entrepreneurship and
clusters.
Shri S.R. PATIL
Honourable Minister for
Planning and Statistics,
IT, BT, Science &
Technology
Ms. V. Manjula IAS
Principal Secretary,
Department of Information
Technology, Biotechnology
and Science & Technology,
Government of Karnataka
With the edge that the State enjoys in the IT sector,
we are confident that the Electronics
manufacturing sector will flourish. The ESDM
Policy will build on the chip design and embedded
software capabilities which State already enjoys.
Skilling initiatives of the State will ensure that
there are skilled human resources available for the
Electronics manufacturing sector.

3. Content
1 Highlights
2 Sector Snapshot
3 Karnataka’s Unique Advantage
4 Government Initiatives and Policy Support
5 Investment Opportunities

4. Highlights
1

5. • 4th Largest contributor to Electronic Industrial Output in the country and recorded a growth
rate of 18% CAGR.
• Presence of 85 chip designing companies
• 3000 personnel to be trained every year in ESDM sector
• First state to roll out initiatives for innovation centres, skilling centres and dedicated ESDM
clusters
Karnataka’s Unique Advantage
• Karnataka Electronic System Design and Manufacturing (ESDM) Policy
announced in 2013
• Policy provides measures for investments, ease of doing business, venture capital, R&D and
Capital Subsidies, Special package for Mega projects
• Encouraging start up ecosystem, patent grants and incentives for export markets, Preferential
Market Access (PMA) and Post performance Incentives and subsidies.
Government Initiatives and Policy Support
• Consumer electronics, Medical electronics, semiconductors, communication hardware and
networking components
• Four Electronic clusters in progress and additional three on the anvil
Investment Opportunities

6. Sector Snapshot
2

7. Electronics is the fastest growing manufacturing sector in the
world driven by the demand for new age consumer electronics
Electronics Market by Region, 2013
North
America
24%
Europe
29%
Japan
12%China
12%
CAGR-1.5%
CAGR-3.1%
CAGR-6.9%
CAGR-0.7%
Rest of the world-10%
CAGR-4.2%
Source: World Electronic Industries 2008-2013-Decision
Global market is expected to reach
USD 2.4 Tn by 2020 from 1.75 Tn in 2013
Other Asia Pacific
Region-13%
CAGR-7.1%

8. Share of Asia-Pacific Region in manufacturing of Electronics products is
growing due to low cost of production and high consumer demand
22%
18%
14%
27%
16%
3%
19%
14% 13%
32%
19%
3%
14% 15%
11%
36%
20%
6%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Europe North America Japan China Other Asia Pacific ROW
World Electronic Industry production by region, %
2008 2013 2017
8%
11%
9%
24%
7%
17%
24%
8%
8%
11%
22%
7%
21%
24%
Electronic production trends by
sector, %
Aero/Defence &
Security
Audio-Video
Automotive
Data Processing
Home Appliances
Industrial &
Medical
Telecoms
2012
2017
Source: World Electronic Industries 2012-2017 & 2008-2013, Decision
4
• Manufacturing of electronic goods have
increased from 2008 in Asia-Pacific Region.
• The production has continued to shift from
developed countries (Europe, North America,
Japan) to Asia Pacific countries

9. Electronics sector in India is experiencing strong growth,
providing a lucrative opportunity for investments
 India Electronics market grew at
CAGR of 14% between 2007-12
 Share of imports in total market
size increased from 54% to 61%
between 2007-08 and 2011-12
 ‘Make in India’ initiative
focusing on reducing
reliance on imports
25.5
28.9
30.7 29.6
42.6
14.1 16.2 18.5 21.5 23.9
13.7
17.9 16.6
14.8
25.9
0
5
10
15
20
25
30
35
40
45
2007-08 2008-09 2009-10 2010-11 2011-12
Indian Electronic Market, USD bn
Market size Production Import
Demand-Supply Gap is projected to increase to USD
296 billion in FY20 Source: ASI, Deity, PwC Analysis
"India will exceed 200
million smartphone users,
topping the US as the
world's second largest
smartphone market by
2016” – (eMarketer)
“India’s appliance and
consumer electronics
sector is set to grow at a
compound annual rate of
13.4%, to touch $20.6
billion by 2020” –
(CEAMA)
CAGR 14%
400
320
104
0
200
400
600
FY09 FY14 FY20
USDBillion
Projected Demand-Supply Gap in Electronics Industry,
USD bn
Total demand Domestic production (target)
Domestic production (at current CAGR)

10. Domestic revenues account for ~ 70% of the
industry’s revenues
5
Source: IESA, Oct 2014, IESA-SSIA-EY Report
Potential opportunity for investors to manufacture in India catering to
domestic consumption and export
Increase demand for High-end
technology devices
Increase in disposable income
Government Initiatives –Digital
India, Smart cities, IOT policy
Growth in Telecom
Infrastructure
Growth Drivers
Product revenues constitute bulk of
revenues followed by revenues from
semiconductor design and electronics
components and services
India emerging as a Semiconductor
design hub
14.5
52.58
0
10
20
30
40
50
60
2015 2020E
Semiconductor design
Market in India, USD Billion
CAGR-29.4%
Key Market Categories
Semiconductor designs, microprocessors, analogue
devices, memory chips, discreet circuits and Application-
Specific Integrated Circuits (ASIC)
 Rising Demand and availability of Talent to boost the
growth of semiconductor design market
 Key end-user segments include communications, IT and
consumer electronics
 National Electronic Policy provides Government support
for electronics manufacturing clusters

11. Karnataka is one of the Top Five States contributing to the
Country’s Electronic Industry
Karnataka is well positioned to nurture domestic growth in ESDM sector
0.8
1.4
1.5
1.3
1.6
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2008-09 2009-10 2010-11 2011-12 2012-13
Karnataka’s Industrial Output,
USD bn
CAGR-18%
Source: ASI 2012-13
Tech Hub
#2
ESDM
Revenues
$ 2.8 bn
Karnataka is the 4th Largest producer of
Industrial Output in India
Karnataka contributes ~10% to the Country’s
Electronic Industrial Output
Karnataka is the knowledge and innovation
Hub of the country
Location of designing companies
Bengaluru is a global hub for R&D activity in the
software industry, which will greatly aid the electronic
hardware industry.
Two ESDM clusters in Bangalore and Mysore being set
up with total investment of USD 25 mn
Presence of Major Electronic Hardware Cluster in
Bangalore
Leading ESDM
companies in
Karnataka

12. Karnataka’s Unique Advantage
10

13. Three key advantages of Investing in Karnataka
High Quality Talent Pool
Enabling infrastructure support
Knowledge and Innovation Hub of the country
1
2
3

14. High Quality Talent Pool
Quem graecis quali sque
no nam, cu enim necessi
tatibus usu. Aeque urb
anitas delicatissimi amet,
consect etu ipsum dolor.
1stState to roll out ESDM
Skill development Program
15,000 youth to be trained
in 5 years
14
Insert date here
6 100,000Research
Talent
2 25,000 PhDs
5 850,000 Direct
Employment, 25
mn Indirect
Employment
1 80,000
Engineers
Added Annually
8 3,500 Tech
Companies
4 ~400 R&D
Institutions
7 500,000 IT
Professionals
3
200+ Engineering
colleges, 200+
Polytechnics and
300 Industrial
Training Centres

15. “Knowledge Hub of India”
“Silicon Valley of India”
“Bangalore-2nd in Global
Startup Ecosystem
Growth Index”
“Bangalore- 4th largest
Tech-Hub in the world”
“Largest number of
R&D institutions”
Moving Towards Building World Largest Technology Cluster
“Best Place to live and
work by Expatriates”

16. Enabling Ecosystem
85
Semiconductor
design firms
70%
of India’s chip
designers
2nd
Largest chip
design hub
Two World class innovation centres for designing,
prototyping, testing, characterization and certification
IIIT-Bangalore and STPI-Bangalore
A Proactive and business friendly policy
environment
An upcoming ICT Academy of Karnataka in association
with GoI & NASSCOM for industry oriented ICT Skill
Development Programs
ESDM Facilitation Cell to assist
investors

17. Startup capital of India offering an unique advantage of innovative
culture
4Startup Warehouse
GoK/KBITS in
partnership with
NASSCOM set up the
first start up warehouse
in the country
3
2Startup Hub
30% share in the country
with over 4000 startup
companies in Bangalore
with an average valuation
of USD 3.3 Million and
14,000 investors
1
6
New Age Incubation
Network (NAIN)
Academic institutions to be
assisted to establish an
incubation facility and for
funding of entrepreneurship
projects in colleges
5 Startup Cell
Facilitate handholding
of new ventures
started by young
people
Fund of Funds
Fund-of-funds for
early stage startup
ventures
1st State to roll out
Multi-Sector
Startup Policy
1st State policy on Startup
addressing the need for
technology in
manufacturing and allied
sectors
Source: Startup Policy 2015-20

18. Government Initiatives and Policy
Support
13

19. Karnataka Electronic System Design and Manufacturing (ESDM)
Policy 2013
Objectives of the Policy
Capital Subsidy for Anchor units in Greenfield clusters
Fiscal incentives in the form Capital subsidy (Upto 10% of capital investment or INR 5 Cr. (USD
0.83 mn)., whichever is lower) and R&D subsidy (Reimbursement of up to 20% of actual R&D
spend upto maximum of 2% of Annual Turnover)
Single window Clearance for ESDM projects
Monetary support for filing Patents
Investment in promotion of innovation culture at educational institutions through initiatives like
New Age Incubation Network
• To achieve 20% of Country’s Exports and 10% of the Country’s Revenue by 2020
• More than 60% of India’s chip design and embedded software turnover
• Produce 25% of India’s PhDs in ESDM, 5000 patent filings by 2020
• 240,000 new jobs to be created by 2020

20. Karnataka Startup Policy 2015-2020
Strategies
Pull out of an important
statistic
goes in this area
11pt Georgia italic
(white)
Pull out of an important
statistic
goes in this area
11pt Georgia italic
(white)
Pull out of an important
statistic goes in this area
11pt Georgia italic
(white)
20,000
technology
based startups
including 6,000
product startups
by 2020
6 lakh direct
and 12 lakh
indirect new
employments
in the sector
Focus on
generation of
25 Innovative
Technology
solutions with
social relevance
INR 2000 Cr
(USD 333 mn)
funding for
startups, by
leveraging the
Fund of Funds
Goals
Encouraging Entrepreneurship
in Education through NAIN
(New Age Incubation Network)
Fostering strong
partnerships between R and
D institutions and Industry
Providing early
stage/Idea2PoC(Proof of
Concept) funding
Creating Incubation
infrastructure through PPP
Startup funding through
Fund of Funds
Channelizing Innovation for
Social Impact
Promoting Capacity
Building through exposure
visits and workshops
Providing State support in
the form of incentives and
concessions
Enablement through startup
cell, Startup Portal and
Hotline
Vision
Towards a
world-class
startup
ecosystem
through
strategic
investment
and policy
interventions
leveraging
the robust
innovation
climate
Vision

21. Karnataka Semiconductor Venture Capital Fund (KARSEMVEN
Fund)
SEBI registered Venture Capital
Fund launched during the FY 2014-
15; 3rd VC fund after the pioneering
and highly successful KITVEN I & II.
Fund Managers-Karnataka Asset
Management Company Private
Limited (KAMCO), a Company
promoted by KSIIDC, KSFC and
SIDBI
Target Corpus-Rs. 100 Cr.(USD 17
mn) With Rs. 25 Cr. (4.2 mn)
Contribution from the Govt of
Karnataka
Hardware startup Sensegiz catches fancy of
KARSEMVEN, raises $500,000
"Sensegiz did its sourcing, assembly, research, all out of Karnataka,
and has a proven global product. This was a right fit for us," said
Manish Kumar B, assistant VP at Karnataka Information Technology
Venture Capital Fund (KITVEN), of which KARSEMVEN is the third
fund. This is KARSEMVEN's third investment from the Rs 96.15 crore
fund and it has taken convertible preference shares in the company.
Set up in 2014-15, KARSEMVEN invests in sectors such as
semiconductor, electronics system design & manufacturing (ESDM)
and embedded systems in Karnataka.
Karnataka government fund puts Rs 5 crore in
Graphene Semiconductor
Two-year-old Graphene Semiconductor has received first investment
from Karsemven, a Karnataka government-backed specialised fund
for semiconductor startups.
Economic Times-Bangalore Edition-Nov 19th , 2015
Economic Times-Bangalore Edition-Jan 29th , 2015

22. Support Infrastructure
SMART Lab (Semiconductor Measurement,
Analysis and Reliability Test Lab)
• 50:50 collaboration between STPI and GoK
• Available Reliability testing and Measurement
equipment
Electronic Hardware common facility
center
1. Mysore EMC Cluster
• Cost of the project-30 Cr. (USD 5 mn) with Govt participation
of Rs.25 Cr. (USD 4.16 mn) (GoK and GoI)
• Chief promoters: Rangsons (Cyient), Skanray, Kaynes, TU, etc
2. Bangalore EMC Cluster in Electronics City
• Cost of the project- ~Rs.100 Cr (USD 17 mn) with Govt
participation of Rs.70 Cr. (USD 12 mn) (GoK and GoI)
Facilities available in these clusters
• Rapid prototyping
• Proto PCB Manufacturing
• SMT assembly line with Testing facility
• Calibration center
• EM Discharge Simulation Lab, Tool room and moldings
1
2
.

23. Investment Opportunities
17

24. Prospective Investment areas in Karnataka
• Diagnostic and therapeutic instruments
• Equipment's testing and monitoring with wireless
connectivity
Medical Electronics
• Manufacturing of networking hardware like gateways,
routers, network bridges, switches, convertors, etc
• Mobile phones, Personal Display Assistants (PDAs)
Communication Hardware
and Networks
• Medical, automotive, mobile equipment's
• Design for Consumer electronics like personal electronics,
PCs, servers, etc
Semiconductor Design
• Audio and video equipment for home entertainment (TV sets,
set top boxes), auto (music systems), and musical instrument
amplification
Consumer Electronics
• Maintenance, Repair and Overhaul (MRO)
• System design, engineering and testing services
• Development of Tactical Communication System (TCS)-
Internet protocol based mobile system
Defence Electronics
• Green field clusters to be developed with line infrastructure
like roads, power and water Eg: Vasanthnarsapura Phase III
& IV and Sira
• Brown field Clusters to be developed with laboratory,
assembly and testing centres, PCB manufacturing, etc
Brownfield and Greenfield
Industrial Clusters
Potential Areas of Investments
For Investments in Infrastructure

25. Existing and Upcoming clusters for ESDM sector in Karnataka
Invest Karnataka 2015 • Energy Sector profile
16
.
Brownfield ESDM common
facilitation centre, Mysore
• Total cost of Rs. 30.97 Cr. (USD 5.16
mn)
• Under implementation
Brownfield ESDM
common facilitation
centre at Electronics city,
Bangalore
• Total cost of Rs. 85.15 Cr. (USD
14.2 mn)
• Awaiting for Approval
ESDM Cluster along
with CLIK,
Doddaballapura
• Total area of 20 acres
Greenfield clusters at
Vasantanaraspura Phase
III and IV
• Total area of 700 acres
Greenfield cluster at Sira
• Total area of 200 acres
Hardware Park + IT
Park, Devanhalli
Existing
Upcoming

26. Investment Facilitation
• Karnataka Biotechnology & Information Technology Services (KBITS):
Government of Karnataka authorizes Dept. of IT, BT and S&T to act as the Single
Window Agency for clearance of IT/ ITES/ Startups/ Animation/ Gaming/ Computer
Graphics/ BPO/ KPO/ other knowledge based industries. KBITS executes initiatives to
enable smooth transition from investment proposal stage to implementation stage.
• KBITS facilitates statutory clearances from concerned agencies to provide a hassle free
experience to the investors.
Karnataka Biotechnology & Information Technology Services (KBITS) was
established in the year 2000. KBITS provides secretarial services to the State Level Single
Window Clearance Committee and State High Level Clearance Committee, for speedy
clearance of the Information Technology and Biotechnology Projects in the State. KBITS
administrates incentives and concessions to Information Technology and Biotechnology
companies. KBITS is the single point contact on behalf of the State Government for providing
all basic information to investors to facilitate the establishment of Information Technology
and Biotechnology Industries in the State.

27. Principal Secretary to Government
Dept. of Information Technology, Biotechnology
and Science & Technology.
VI Floor, 5th Stage
M.S.Building, Ambedkar Veedhi
Bangalore - 560 001
E-mail : itbtsec@gmail.com
Contact Details
Managing Director
Karnataka Biotechnology & Information
Technology Services
BMTC- Central Offices Building
TTMC 'B' Block, 4th Floor,
Shanthinagar, KH Road,
Bangalore 560 027
E-mail : itdir@bangaloreitbt.in, mdkbits@gmail.com