Manufacturers Expect Government Policy To Focus More On Exports

Indira Datta - Jan 05, 2019

The government should consider cutting export taxes to ensure the development potential of the electronics industry.

To strengthen the development of India's economy and technology, in October 2018, the government came up with a new policy on the domestic electronics industry.

However, this policy may not be very well received by phone manufacturers as they think it is not strong enough and needs to be changed more.

The Indian Cellular and Electronics Association (ICEA) sent a letter to secretary Ajay Prakash Sawhney of the Information Technology Department, saying that big technology companies in the world such as Samsung, Oppo, Apple, Huawei, Vivo, Foxconn, and LG will require a plan as well as an outreach included in the vision document.

They also stated that if they are to implement surgical strategies to bring about relentless and quantifiable milestones, merely words is not enough. The main step in the plan to expand their business scale is to attack the global market. For those who do not know, the group consists of Lenovo, Oppo, Foxconn, Vivo, Apple, Xiaomi, Flex and Wist, on.

According to the draft issued by the government, import duties on hardware and components used in the production of laptops and smartphones are reduced by 10%. Hardware for producing lithium-ion batteries, PCB coating machine, data transmission cables, receivers and various types of speakers, are included in the tax reduction category.

The government does this with the aim of lowering the cost of production in India and thereby attracting more investments in infrastructures. However, ICEA argues that the government should also issue exemptions on export duties.

Electronics manufacturing in India

The government expects that by 2025, this policy will bring in a turnover of $400 billion from the domestic production of electronics. The cellular association has stated that if the government does not improve its export tax, it is challenging to achieve the goal.

As in the letter, the government should have significant changes in several aspects including industry, leadership, trade, and bureaucracy to share the focus on both exports and imports.