on Enhancing Export Competitiveness of India’s Electronic Hardware Manufacturing Ecosystem
Key policy measures and recommendations to move from anImport Substitution led manufacturing system to an Export led Electronic Manufacturing Ecosystem
New Delhi, September 19, 2019: Today, Manufacturers’ Association of Information Technology (MAIT), along with The Dialogue, a New Delhi based independent think-tank, released the report entitled “Enhancing Export Competitiveness of India’s Electronic Hardware Manufacturing Ecosystem”. The report commissioned by MAIT, focuses on analysing the current export and overall trade ecosystem of India to outline a combination of policy reforms, consisting of reimbursements of state and central tax levies, relaxation on corporate income tax and production-based incentives to boost the electronics manufacturing in the country all while remaining compliant with the WTO norms.
In the presence of the Electronics and IT manufacturing industry,the report was launched by Shri Ajay Prakash Sawhney, Secretary, MeitY.
As part of its mandate of enhancing ‘export-led electronics manufacturing’, MAIT and The Dialogue have worked out a roadmap for the electronics sector with specific emphasis on Mobiles Phones and Chargers, Network Equipments and PCs and Monitors. In the backdrop of the recent announcement by the Finance Minister about introduction of Remission of Duties or Taxes on Export Products (RoDTEP) and the phasing out of Merchandise Export Incentives Scheme MEIS, the report emphasizes that in order to compensate for the discontinuation of the MEIS framework, India needs a policy framework that gives a net compensation of minimum 8% to the electronics manufacturing sector, which will not only make Indian products competitive vis-à-vis its competitors, but will also attract foreign manufacturers to come Make In India and export their goods from here.
The report suggests creating a capital investment framework, tax holiday for initial years following which a corporate tax of 15 percent. The report calls for production-based support that includes supporting R&D, skilling of labour, getting state governments involved in export policies, product certification based on highest standards, easing transport and logistics, uninterrupted power supply, development of plug & play and component ecosystem.
Speaking on the topic, Mr. Kazim Rizvi, Founder, The Dialogue said “To achieve the Prime Minister’s target of making India a $5 trillion economy, exports will have to play an important role. Here, enhancing the export competitiveness of electronic manufacturing so that India can make for the world by shifting global supply chains here is a critical objective to achieve over the next three years. In this regard, our suggestions to the Government to provide an 8% support that is equal to the incentives provided under MEIS, to the electronics industry will be an important step to realise the Hon’ble Prime Ministers objective, which will add millions of jobs, bring in foreign exchange, increase local value addition and simulate the overall India economic growth.”
With India now looking at massive scaling in local manufacturing, MAIT and The Dialogue strongly recommend setting up of component hubs and developing local supply chains to meeting India’s disabilities vis-à-vis south east Asian countries.