Manufacturing companies want sops to cover more electronic items

India Inc has sought an extension of the Rs 41,000 crore production-linked incentive (PLI) scheme currently directed to boost local mobile phone manufacturing to also cover TV, set top boxes, air conditioners and washing machines.

In its recommendations, seen by ET, the Confederation of India Industry (CII) also called on the government to declare the entire electronics industry as an ‘essential industry’ as the Centre looks at ways to restart industries and allow mobility of goods and services restricted due to the Covid-19 induced nationwide lockdown.

“The entire electronics industry should be recognised as an ‘essential industry’, in as much as the restarting of the industries and mobility of goods across the country (which have been restricted due to the Covid-19 outbreak),” CII said.

It said that the recently-notified investment schemes to boost manufacturing of mobile phones in the country should be extended to the rest of the electronics manufacturing sector including TV, set top boxes, air conditioners and washing machines. It also asked for a lowering of the threshold—from the current Rs 100 crore to Rs 20 crore in turnover—in mobile and component manufacturing.

The government last month notified three schemes with incentives totalling Rs 48,000 crore to boost mobile phone manufacturing in the country and the dominant scheme of PLI has the lion’s share of close to Rs 41,000 crore incentives to be spread over three years.

Along with reviewing the ITA-1 list (1997), in order to boost exports, CII has suggested a short-term package to boost competitiveness in electronics manufacturing. It has proposed that a company setting up base in India should not have to select between being an export-led company or a domestic manufacturer.

“A WTO compliant scheme for providing an incentive of 4% of FoB (freight on board) value, income tax holiday on export earnings and incentive scheme (including cost of finance) should be at par with those adopted by neighbouring countries (Vietnam),” the industry body has said.

CII further sought preferential market access for the electronic goods manufactured in India for all government procurement as this would be a shot in the arm for local manufacturing.

“The entire Digital India platform, all central and state government purchases and those done by railways & PSUs presents a very large market. Indian manufacturing is technically competent to serve these requirements competitively,” CII has recommended.

The industry grouping also sought formulation of a strategy and roadmap for developing the semiconductor industry in India. “An expert group may be set up in order to arrive at the best approach to establish this much needed strategic investment in semi-conductor fabs,” the body has said, while calling for uniform standards on a par with global benchmarks for electronic products and easy certification.

―Business Journal