IT sector seeks support against protectionism

Finance Minister Arun Jaitley said India's external position was more robust now and the economy's resilience to periodic global shocks was sustainable.

This optimism was reflected by the lower trade and current account deficits, stable exchange regime and the sound buffer of forex reserves.

In his pre-Budget consultative meeting with stakeholders from the IT (software/hardware) sector here on Saturday, Jaitley pointed out that India's competence in IT software is recognised globally. In recent times, software development and Information Technology Enabled Services (ITES) industry had emerged as one of the most dynamic and vibrant sectors in India.

He said the Government recognises the potential of the IT sector and hence electronic systems and IT and BPM(business process management) have been included in the 25 sectors in the ‘Make in India’ programme.

Jaitley also said that the electronic market in India is one of the largest in the world and is expected to reach $400 billion in 2020. Meanwhile, the IT sector representatives sought the Government support in view of rising protectionism and anti-globalisation forces. Also, the rapidly changing nature of technology in the IT field makes it imperative to focus on R&D, hence the Government needs to promote R&D and innovation in IT sector in a big way, they added.

Further, there are issues about speed and reach of broadband in India. The number of Wi-Fi hotspots is very low in the country. Hence, it was suggested that over-ground towers and underground fiber cable network need to be improved in a big way. At the consumer end, smart phone prices need to be further brought down so that broadband is more accessible to masses. It was appreciated in the discussion that green shoots are visible in smart phone manufacturing industry in India and manufacturing of these phones is increasing rapidly. Also, street price of the India-made smart phones is competitive when compared to the China-made phones. So the next logical focus of Indian smart phone manufacturers should be to target the export market.

To further boost electronic manufacturing in the country, suggestions were made to extend the duty differential scheme to all ITA goods, specifically for personal computers (desktop, laptop).

A proposal requested that list of CPE goods should be make comprehensive for Duty Differential Scheme to further promote and implement ‘Make in India’ initiative. Representatives said the scheme must continue to exist in the GST regime.

To create an ecosystem for electronics and IT hardware manufacturing, proposal for a ‘Component Trading Hub’ was discussed. It would bring down logistics costs by creating robust infrastructure for connectivity. Participants also insisted on the need to encourage populated PCBs (printed circuit boards) manufacturing in the country by restricting their direct imports.

A representative from a robotic firm requested incentives to boost the robotics sector in country which is at present non-existent.

Adoption of personal computer will be a catalyst for transformation of country to a digital economy and knowledge economy. To increase PC reach, it was also proposed that easy loans (3-4 per cent per annum ) should be provided by banks for the purchase of personal computers and cost of PC should be allowed for deduction under Section 80C of Income Tax Act.

IT sector representatives present during the meeting included R. Chandrashekhar, President , Nasscom, TV Ramachandran, President, Broadband India Forum, NK Goyal, President, CMAI Association of India, Pankaj Mahindroo, Chairman, Fast Task Force & National President, Indian Cellular Association, Prasad Garapati, Chairman, Electronics and Computer Software Export Promotion Council, Nitin Kunkolienker, Vice-President, Manufacturers Association for Information Technology (MAIT), Vikram Desai, President, Electronic Industries Association of India, Jaspreet Grewal, The Centre for Internet & Society, UB Praveen of Infosys, Arvind VS of, Wipro, Pauroos D Karkaria of TCS, Nisha Tompson, Founder, Datameet, Ajith Pai, COO, Delhivery, Sunil Dutt, President, Device Sales, Jio Mobiles, and Vartul Jain, CFO, Grey Orange India, among others.

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