LED players demand policy, fab units and packaging clusters

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By Srabani Sen

The Bureau of Energy Efficiency (BEE) and the Bureau of Indian Standards (BIS) are coming up with standards for LED manufacturers in order to protect consumer interests and also to facilitate tendering procedures for public utilities like street lighting. “These standards will be announced within four to five months,” said Dr Sandeep Garg, director, BEE, while addressing the International LED Forum India 2011, which was organised recently by the Department of Information Technology (DIT), Ministry of Communications and IT, along with the LED products Manufacturers Association of India (LEDMA).

The Forum emphasised the importance of LED chip manufacturing, LED packaging and LED product manufacturing in India, in order to cater to the increasing applications and requirements in the Indian as well as global markets. In addition, there would be equal opportunities to export these LED products, which could achieve a turnover of US$ 50 billion if they are positioned properly in the global market. This would account for more than 10 per cent of the electronics hardware market in India.

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Concerns of LED players

Highlighting the concerns of the LED players, Ramana Rao, president, LEDMA, said, “Now our focus should be to evolve a clear policy to establish fab and LED packaging clusters, which will enable domestic players and those from abroad to take up manufacturing in India.” Adding to this, Ramakrishna D, managing director, Efftronics Pvt Ltd, said, “Considering the potential for energy savings through LED products, the government should consider extending the same incentives to the LED players as those given to the solar and other renewable energy sectors.”

The Forum also stressed that in order to create an investor friendly atmosphere, the government should consider tax concessions on the import of technology and offer tax holidays.

LED players also demanded that the components used in the manufacture of LED luminaries be exempted from the duties of customs and central excise. “The biggest anomaly is that LED luminaries attract central excise duty at 5.15 per cent, whereas we have to pay a huge VAT of 14.5 per cent, and this requires to be addressed immediately,” said K Vijay Kumar Gupta, Kwality Photonics.

Association with ancillary units

The Forum was unanimous that the LED industry has to work in association with other ancillary units to meet the requirements for mechanics, optics, thermal management, power electronics, etc. “In order to ensure development of this sector, it is necessary for the government to support the development of LED clusters by extending subsidies for building the necessary infrastructure on par with international standards,” said Ramana Rao.

The Forum also suggested that in order to facilitate the timely and much-needed support of the government to the LED sector, it could consider creating a committee comprising representatives from the ministries of IT, MNRE, power and finance. It urged the government to extend soft loans to LED players from the cess collected on coal. “In the form of subsidies on kerosene, we are burning millions of rupees every year and this can be avoided if the money is invested on solar based LED luminaries for rural households,” said a speaker.

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