NITI Aayog, the government’s premier think tank, has junked its first dedicated ‘Make in India Strategy for Electronic Products’ and has floated another policy that is more export-oriented and favors developing coastal economic zones.
The previous policy paper had faced opposition from the Ministry of Electronics & Information Technology as well as reservations from other stakeholders mainly because of its domestic focus and its emphasis on semiconductors.
NITI Aayog had floated a policy paper once that never went forward since many people had reservations on it. The ministry is, however, fully supportive of the second draft paper submitted by the think tank.
India’s domestic consumption of electronics hardware was $63.6 billion in 2014-15, with imports accounting for 58% of the total. NITI Aayog had initially come out with a draft policy that sought to attract global electronic manufacturers to set up units in India and give a push to Prime Minister Narendra Modi’s pet project, Make in India. The draft policy suggested a 10-year tax holiday for companies investing over $1 billion in electronics manufacturing or creating 20,000 jobs in India.
It has now been shelved in favour of the proposal to set up coastal economic zones for labour-intensive sectors in the country, much along the lines of China, to enable manufacturers to tap overseas markets without much difficulty.
NITI suggested that the country needs to forge free-trade agreements to create duty-free markets for electronic goods. It had said India’s current approach with respect to such agreements is defensive because it is a bigger importer of electronic products than an exporter.
The policy paper could not fructify since it talked about investments from semiconductor companies, something that appears impossible to pursue at the moment.
By Baishakhi Dutta