NITI Aayog seeks tax holiday to attract large firms
The Dollar Business Bureau
To attract large companies including some foreign firms to India, NITI Aayog recommended a 10-year tax holiday for the firms willing to invest over $1 billion in electronics manufacturing industry.
NITI Aayog, in its draft report titled ‘Make in India - Strategy for Electronic Products,’ stated that they welcome a ten-year tax holiday on investments valuing $1billion which will also create 20,000 jobs in electronics manufacturing sector.
The policy think-tank has also called for an export-oriented strategy for the industry stating that the local market is worth $65 billion, which is just a fraction of the $2 trillion global market.
Huge success can comes only when our operations in world markets are active. Hence, policies need to be reoriented to make the domestic industry competitive in global exports market, said the report.
India’s domestic requirement of electronics hardware in financial year 2014-15 was $63.6 billion, while the imports accounted for up to 58 percent of the given figure, it added.
The report further emphasized that India needs to forge FTAs (Free Trade Agreements) for a duty-free market in the electronics sector.
The current approach of India with regards to FTAs is defensive as it is a huge importer of electronics, the report said while adding that if the country shifts towards export-oriented policies then FTAs will turn into opportunities.
The orientation to exports will also allow India to ink the Information Technology Agreement 2 - a plurilateral agreement within the WTO, it added.
The think tank also recommended setting up of coastal economic zones, which could be 200-250 km wide and long along coastline, encompassing a modern port.