The Manufacturers’ Association for Information Technology (MAIT) has suggested that the government should have proper taxation system within the country to promote local manufacture.

MAIT, India’s premier ICT hardware industry association, unveiled their report “Policy Interventions for Achieving ‘Net Zero’ Imports – IT-Electronics Sector”.

Nitin Kunkolienker, Vice President, MAIT and Director, Smart link said, “We have suggested the Government of India some key policy and market interventions to achieve the vision of ‘Net Zero Imports’ and ignite a culture of domestic ICT and Electronics product manufacturing in the country. Within the manufacturing sector, the growth of the IT-ESDM industry is critical for realising the goals of ‘Make in India’ and ‘Digital India’ launched by the Government, and help establish India as a worldwide PC market by 2020.“

“With the right measures there is potential to ramp up IT hardware production to US$ 2.6 billion within a year and put India firmly on the path to becoming a global ESDM supply chain hub“, Kunkolienker added.

The study seeks to highlight that compared to other low cost jurisdictions India poses some disabilities for IT-ESDM manufacturers. The cost of manufacturing is estimated to be higher in India vis-à-vis other global hubs. These are on account of physical factors such as higher costs of power, real estate, logistics, additional expenses on account of freight, as well as fiscal factors. India has a multitude of taxes and duties imposed by both the Central and State Governments. Because of their flawed structure, these taxes often discriminate against domestically manufactured products.

Therefore, the current study was designed to analyze in-depth the state of the IT hardware manufacturing sector in India, with special emphasis on desktop PCs, laptop PCs and servers, identifying inherent drawbacks when compared with China, Taiwan and other East Asian countries.

Further, the study findings propose tax policy interventions in the immediate and short term that can lower the disabilities, reignite the growth in this sector and help it to contribute to India’s vision of ‘Make in India’ and ‘Net Zero Imports’.

MAIT has brought to the attention of government policymakers, 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 and Electronics goods.