Making India an Electronics Manufacturing Hub

The Information Communication Technology & Electronics (ICTE) industry in India is witnessing uninterrupted consumption led growth, which is presently pegged at US$ 100 billion. The CII National Committee on ICTE Manufacturing thus focused on making the industry increasingly competitive, introducing value addition based incentives and encouraging development of the value chain.

Extensive engagement was undertaken with Ministry of Electronics & IT (MeitY) and other related Ministries. Advocacy efforts focused on the need to mitigate disability factors, retaining existing incentives available to domestic manufacturers in the GST regime, reducing transaction costs through simplification of procedures. Major recommendations made to the Government include:

  • Introduction of value addition based methodologies for compensation of disabilities related to high cost of power, finance and logistics
  • Extending the scope of ‘Production Subsidy’, a value addition based incentive to all existing and new investments
  • Removal of ‘Surety’ clause from the revised ‘Import of Goods at Concessional Duty (IGCD) procedure’
  • Suggestion for the implementation of Preferential Market Access (PMA) provision for all Government initiatives such as Digital India and Smart Cities and ‘Prakash Path/ UnnatJyoti by Affordable LEDs for All’ (UJALA)/ Domestic Efficient Lighting Program (DELP) for LED lighting with domestically manufactured products. It was also proposed that the scope of PMA be extended to cover purchases by State Governments as well.

Suggestions were made to MeitY regarding the tax structure for ICTE industry under the GST regime.

Ministry of Electronics and Information Technology (MeitY) is actively considering the recommendation for providing compensation to mitigate the competitive disadvantage caused by high costs of finance, power and logistics. The Ministry was also urged to implement the policy provisions of DTA sales of ITA -1/Zero Duty on ICTE products, extending benefits similar to physical exports.

The scope of differential excise duty has been extended to cover charger/adapter, battery and wired headsets/speakers for supply to mobile phone industry and also some notified CPEs. CII suggestions on bringing parity in taxation on manufactured items in DTA and export oriented schemes for DTA sales were aimed at promoting Make in India. These suggestions are under consideration by the Government. With a view to encouraging local manufacturing, the Ministry is also considering a proposal to increase the BCD for non-ITA-1 products. In line with the Government’s ‘Make in India’ initiative, CII organized a Session titled ‘Creating Roadmap for Developing Value Chains in the ICTE Industry’ that was aimed at progressively increasing domestically manufactured inputs in finished products. Focus was on three growth driving products – Mobile handsets, LED Lighting and PCB&PCB Assemblies. The recommendations emerging out of the discussions from the Industry were taken-up with the Ministry of Electronics & IT(MeitY). In January 2015, recognizing the energy saving possible through widespread usage of LED lighting, National LED programme UJALA (UnnatJyoti by Affordable LEDs for All) was launched across the. Under this programme, EESL aims to replace 770 million energy inefficient bulbs in the residential sector over three-year period with LED bulbs. With this background, an Interactive Session on Making India a Manufacturing Hub for LED Lighting was organized in April 2017.

The objective of the Session was to put across the manufacturing capabilities and production capacities for LED bulbs/lighting products and preparedness in meeting the demand through domestic production with value added products, integrating component/parts manufactured in the country and discuss support required in ramping up the capacities to address the export market also. The recommendations emerging out of the discussions from the Industry would be taken-up with EESL and Ministry of Electronics & IT (MeitY) for necessary action.

 

 

 

Source: CII Mission Manufacturing 2017

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