There is potential to generate 100,000 direct jobs and 300,000 jobs in components manufacturing over the next five years revealed an independent study conducted by industry body MAIT.
Titled the “Policy Interventions for ‘Net Zero Imports’: India IT-ESDM Sector” the study further reveals that within the manufacturing sector, the growth of the IT electronics sector is critical for realizing the visionary initiatives of ‘Make in India’ and ‘Digital India’ launched by the Government, and help India garner a 10% share of the worldwide ESDM sector by 2020.
Anwar Shirpurwala, Executive Director, MAIT said, “India has a large and growing market for IT products and ESDM hardware. Due to various disabilities impacting domestic manufacturers, a large part of this market is being served by imported products, mostly from China. In 2015, we believe the share of domestic manufacturers was only 45 per cent of the total ESDM market of USD 31.6 billion. For the IT products market of USD 5.8 billion this proportion was even lower at around 32 per cent.”
To encourage domestic manufacturing of IT products, the industry is requesting that the differential excise duty regime introduced by the Government in 2015 for mobile phones and tablets be extended to Notebook PCs and Desktop PCs. The differential duty regime requires the excise duty on Notebook PCs and Desktop PCs to be brought down to 2% without any facility for input tax credits, and an exemption from excise duty for parts, components and sub-assemblies, which go into manufacturing of PCs.
This will provide a level playing field for domestic manufacturers of these products and allow them to serve a larger share of the Indian market. The manufacturers of these products are operating well below their capacity and would be able to ramp up their production very quickly without any gestation lag associated with new greenfield investments. The increased scale of domestic production will facilitate development of the ecosystem of production of components and parts.
Based on the legacy scenario of IT-ESDM manufacturing in India, MAIT has highlighted key issues that need to be addressed on priority, to improve the business environment in the country and to attract more investment in manufacturing of IT & Electronics goods.