- It is the window of opportunity for India to come up with as many incentives as possible to draw attention
- The tax cut is a clear signal from the government to boost investors’ confidence in India’s economy
The four top senior smartphone industry executives told Reuters that India’s lower corporate tax rate will help its smartphone industry expand, fuel research and development investment and attract higher-value component makers to the world’s second-biggest smartphone market.
In a bid to woo manufacturers and boost investment, Finance Minister Nirmala Sitharaman slashed corporate tax rate to 22 per cent from 30 per cent. Not only this, but Sitharaman also announced that new domestic manufacturing companies incorporated after October 1 will pay the income tax at the rate of 15 percent. This means the effective tax rate will be 17.01 percent, inclusive of all surcharge and cess.
What industry has to say?
Vikas Agarwal, India head of China’s OnePlus, told Reuters that this is a clear signal from the government to boost investors’ confidence in India’s economy. He added that it will directly affect a company’s profitability, help fuel consumption – but more importantly it also reflects India’s ambitions,” he said.
A spokeswoman for Beijing-based Xiaomi, told Reuters that they are hopeful that we will be able to bring more of our component suppliers to India and help boost the local manufacturing industry further.
Shih-Chung Liu, vice chairman of Taiwan’s External Trade Development Council, told Reuters that it is the window of opportunity for India to come up with as many incentives as possible to draw attention. He added that this is a good start, but it is just one major incentive.
India is currently the world’s number two mobile phone maker and the smartphone industry, which is central to Prime Minister Narendra Modi’s ambitious “Make in India” drive.
India has been continuously trying to make efforts to attract investment, especially in labor-intensive electronics manufacturing.