The Hindu Business Line : Electronics hardware body seeks sectoral dispensation

THE Council of Electronic Hardware Associations (CEHA), a body comprising the associations of the electronics and IT hardware industry, has urged the Government to make a special sectoral dispensation to sustain the investments made in this sector and make India an attractive destination for electronics manufacturing.

In a representation to the Minister for Communication and IT, Mr Dayanidhi Maran, the four associations which are part of CEHA - the Consumer Electronics & TV Manufacturers Association, the Electronic Component Industries Association the Manufacturers Association for Information Technology and the Telecom Equipment Manufacturers Association of India - submitted that there should be no difference in the policies governing these segments of the electronics/IT hardware sector.

"In this era of convergence, differentiation of products as IT or telecommunication or consumer electronics is getting blurred. For example, a mobile phone can be used for communication, for accessing Internet as camera or to receive television signals," they said.

With a view to making this industry globally competitive and achieve its full potential, these associations have joined hands to form CEHA.

They further submitted that since the sector will operate in zero duty regime, labour laws as applicable in special economic zones, should be made applicable to this sector.

CEHA also urged for incentivising electronics manufacturing. The associations have requested for 100 per cent income-tax benefit for 10 years for electronics manufacturing companies, as accorded to software sector.

Regarding implementation of free trade agreement (FTA), they said that it should be deferred by five years, till such time the disability factors are mitigated. The industry in India (electronic components, consumer electronics, IT products and telecom equipment) is undergoing severe hardship due to soon to be implemented IT Agreement of the WTO and the FTA with Thailand.

It today faces inverted duty structure with basic raw materials and dual usage items attracting higher customs duty than the finished goods. Further, the nature of the products is such that they have high obsolescence and the issues get compounded with disability factors such as high cost of capital, energy and other infrastructure deficiencies.

CEHA also sought modification of EHTP (Electronics Hardware Technology Park) to permit 100 per cent DTA (Domestic Tarif f Area) access for all electronic products, currently limited to ITA-1 products.

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