Key recommendations to move from an Import Substitution led manufacturing to an Export led Electronic Manufacturing Ecosystem
New Delhi, September 19, 2019: Manufacturers’ Association of Information Technology (MAIT), today, released the report titled “Enhancing Export Competitiveness of India’s Electronic Hardware Manufacturing Ecosystem”.
The report commissioned by MAIT, focuses on analysing the current
ecosystem to outlining a combination of policy reforms, consisting of
reimbursements of state and central tax levies, relaxation on corporate
income tax and production-based incentives to boost the electronics
manufacturing in the country. In the presence of the Electronics and IT
manufacturing industry, Niti Aayog & Invest India the study was
launched by Shri Ajay Prakash Sawhney, Secretary, MeitY.
Present on the occasion were Industry captains Mr. Richard Hopkins,
Global President, Manufacturing Operations - Flex Group, Mr.
Muralikrishnan B, COO Xiaomi India & Mr Prashanth Mani, MD -
Motorola.
As part of its mandate of enhancing
‘export-led electronics manufacturing’, MAIT has worked out a roadmap
for the electronics sector with specific emphasis on Mobiles, Datacom
and PCs. In the backdrop of the recent announcement by the Finance
Minister about introduction of Remission of Duties or Taxes on Export
Products (RoDTEP), the report emphasizes that in order to compensate for
the discontinuation of the Merchandise Export from India Scheme (MEIS)
framework, India needs a policy framework that gives a net compensation
of minimum 8% needs to be given to the electronics manufacturing sector
to overcome India’s disability.
With India now looking at massive
scaling in local manufacturing, MAIT strongly recommends setting up of
component hub to decrease India’s disability.
In addition, the study encapsulates the
technical reasoning for the harmonization of incentives for both mobiles
and chargers to provide impetus for export-led mobile manufacturing in
the country.
Speaking at the event, Mr. Nitin Kunkolienker, President, MAIT
said, “We are committed to bringing a positive change in the sector by
moving from a domestic-consumption led manufacturing to an export-led
approach. This report is also a step in this direction and the intention
is to voice the industry’s requirements and recommendations while
identifying key opportunities that can be leveraged to enhance the
electronics and IT manufacturing ecosystem in the country.”
Mr. Nitin Kunkolienker also said that
India is looking at a foreign exchange bill of Rs 5.37 lakh crores on
Mobiles, PC and Datacom product consumption by the domestic market in
the year 2025 if India does not develop an export led manufacturing
ecosystem soon.
However, if India aims and achieves 20%
share in the global production by 2025, then India can generate a net
positive foreign exchange of Rs. 1.19 lakh crores and contribute Rs.
4.71 lakh crores to India’s GDP. Further PCs as a category has the
potential of generating a net foreign exchange positive of Rs 72000
crore.
Mr Kunkolienker further emphasised that
the incentive framework strategy needs to include the component
ecosystem so that along with volume, India also builds on value.
The report identifies and estimates
India’s disabilities and recommends short-term and long-term
interventions to create an export-led electronics manufacturing
ecosystem in the country. Some of the key observations in the report are
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