To ‘Make in India’ electronics firms seek level playing field

S Ronendra Singh New Delhi | Updated on September 18, 2019 Published on September 18, 2019

IT Minister Ravi Shankar Prasad chairing a round table discussion with CEOs in New Delhi on Monday   -  Kamal Singh

The Centre has to balance the demands of diverse companies to attract investments

The government, which is working on policies for handset and other electronic manufacturers, may not have an easy task as it has to accommodate disparate demands of different companies.

For instance, while companies such as Nokia, Panasonic and others want a reduction in GST rate to help improve exports, some others demand a level playing field saying that the firms like Samsung are already getting a lot of benefits including zero import duty on many items due to Free Trade Agreement between South Korea and India. These issues came up at a closed door meeting convened by Electronics and IT Minister Ravi Shankar Prasad on Monday.

Many players are willing to set up more manufacturing plants in India, but they are going slow due to the complicated tax systems in the country.

“Panasonic, for example, said they are ready to set up two more manufacturing plants in the country, but they want a level playing field and asked for a reduction in GST on TVs of 32-inch and above to 18 per cent from the prevailing 28 per cent,” a senior government official present at the meeting told BusinessLine. Television sets up to 32-inch face are subject to GSTof 18 per cent.

Similarly, telecom equipment maker Nokia wants incentives for exporting products manufactured in India and also relief on components imports, the official said. The company has already started exporting 5G equipment out of India to Europe and the US and has shipped electronic items worth ₹3,000 crore over the last few months.

Companies like IFB, on the other hand, want incentives for recycling electronic items and called for rationalisation of taxes for promoting recycling.

Manufacturers’ Association of Information Technology (MAIT) said that there is a capacity of six-million units of personal computers (including laptops) in India right now, but only 15-20 per cent of this capacity is being utilised, and this is the reason why incentives are important.

“So there is a lot of room for manufacturing more, but it is not happening because there is no incentive. This is why many global companies do not want to manufacture here. We need some kind of incentives to bring them here on large scale,” George Paul, CEO, MAIT, said adding that the industry is expecting friendly policies as announced by the Minister on Monday.

Prasad had said that the government will offer human resource, friendly policies and incentives to the global companies which want to come and make in India.

“...We are absolutely open if you (global companies) want to set up facilities even if it only for exports,” he said after meeting with 54 chief executives from electronics and mobile phone companies and eight industry bodies.

A task force is being set up under NITI Aayog to work on policies to incentivise manufacturing in a big way that would cover various aspects including sops by States as well as favourable policies related to land and energy.

Published on September 18, 2019
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