Budget Should Boost IT Manufacturing in India

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Top players from the Indian IT industry have shown hope that the government will respond in a favourable manner to its demands with respect to a level playing field for kick-starting IT manufacturing in India. The Manufacturers’ Association for Information Technology (MAIT), an Indian apex body representing IT manufacturers presented a study called “Policy Interventions for ‘Net Zero Imports’: India IT-ESDM Sector” (February 2016) on Sunday, 28 February.

The study highlighted key policy and market interventions for achieving the vision of  Net Zero Imports’ along with igniting a culture of domestic IT and ESDM product manufacturing in India. In the manufacturing sector, the growth of IT electronics sector is vital for attaining the visionary steps of ‘Make in India’ and ‘Digital India’ launched by the Government. It also assists India in garnering a 10 per cent share of the worldwide ESDM sector by 2020. There is also the potential for generating 100,000 direct jobs and 300,000 jobs in components manufacturing in the coming five years.

Mr Sandeep Aurora, Director Marketing and Market Development, Intel South Asia expressed his opinion on the report by saying that, “We believe that PCs are an important tool of productivity, learning and development and that it is critical to provide consumers a wider choice of affordable computing devices for their specific needs. In line with this, we hope that this year’s budget will extend duty incentive schemes given to mobile phones and tablets to all the ITA goods including PCs which is critical for empowering every citizen with technology. Several IT hardware players have their manufacturing facilities in India that are currently under-utilized due to weak demand. The suggested duty differential will spur the domestic consumption leading to increased production, thereby boosting manufacturing by these players and creating a winning proposition for the government on ‘Make in India’ especially because this can be done without extending any capital support or incentives, for example, M-SIPs, since the facilities already exist.”

Further, Mr P. Krishnakumar, VP, Consumer & Small Business, Dell India Private Limited pointed out his views regarding the proposed measures and stated that, Dell India Private Ltd is a technology company that has been manufacturing in India since 2007. They applaud the government’s focus on electronic manufacturing and appreciate the policy measures taken under ‘Make in India’.  The company stressed that In order to boost electronic manufacturing in India, it is important that a local component manufacturing ecosystem is developed.  For enabling this, a holistic policy approach is required which takes into account domestic demand and export potential and treats electronic system design and manufacturing as a unified priority sector.

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Apart from the above, there were also other MAIT members who are key players in the PC and Electronic Hardware manufacturer in India. They showed their support for the findings of the report and stated that they are hoping that the Government will consider the proposals highlighted in MAIT report in Budget 2015-16 and will ensure that the benefits coming out of the proposal far outweigh the perceived revenue loss.

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