NITI to seek Cabinet nod on electronic mfg policy
The Dollar Business Bureau
In order to enhance electronic products manufacturing, India’s policy think tank NITI Aayog is expected to seek approval of the Union Cabinet within 15 days for a long-term policy, which will offer a host of incentives such as tax holiday for attracting investments.
Seeing a great potential in electronics manufacturing segment, NITI Aayog has drafted a strategy paper on ‘Make in India - Strategy for Electronic Products’.
In May this year, the Aayog had put up the paper for comments in a public domain. The general public and the stakeholders were asked to provide their comments and views by June 30, 2016.
The think tank had suggested a tax holiday of 10 years for firms investing more than $1 billion in the electronics manufacturing sector.
“We would also want to provide for the 10-year tax holiday on investments of $1 billion or more that can also create 20,000 jobs. This would help bring some large foreign firms to India,” NITI Aayog had said in the paper.
In addition, the Aayog has been asked to draft an export-oriented strategy for the sector, by mentioning that the $65 billion domestic market remains small when compared to the global market of over $2 trillion.
The think tank believes that big success need operation in a huge world market. That’s why, India needs to reorient its policy to make the industry competitive in the exports markets.
In 2014-15, the local consumption of electronics hardware in India was $63.6 billion whereas imports were 58 percent of the given numbers.
The Aayog suggested that India needs to sign free trade agreements (FTAs) that can create duty-free market for electronic products.
Currently, India’s approach with regard to FTAs is defensive as the country is a large importer rather than an exporter of electronic goods, it added.