Foxconn and other manufacturers announced big investment plans for India last year. Does 'not so good' global sales and palpable China meltdown make India the golden manufacturing hub for technology OEMs?
The national policy on electronics introduced in 2012 did not witness much movement for almost one and half years. With the new central government in India and the whole 'Make in India' program announcement has gained lot of momentum the world over.
There is lot of manufacturing happening in mobile and tablet segment in India due to the segment's favourable duty structure. Digital India's objective is connecting every citizen, every household, and every small business to the internet. To be part of Digital India, bouquet of products will be consumed including PCs, smart phones, tablets, consumer premise equipment, small switches, routers, dongles, smart televisions etcetra. Will this big demand to empower Digital India be sufficed by imports or local manufacturing? This therefore makes an absolute case for 'Make in India' program.
MAIT believes that the duty differential should not be restricted to couple of products. Digital India needs the gamut of dozen odd products to be deemed eligible for duty differential which is our most vital recommendation for this year's budget.
Will 'Duty Differential' demand by MAIT lead to 'Make in India' shining brighter in 2016?
From that perspective, this year's budget (later this month) is exceedingly important. If duty differential is introduced for PCs, laptops and notebooks, the biggest advantage is that four players -HP, Dell, Lenovo and Acer- have their manufacturing facilities in India. It is a ready facility but it is fairly underutilised.
Government will not have to give any capital subsidy or anything as the investments have already been made. Government saving money on that front can give that incentive and PC players with ready facilities can start the production instantly with that advantage. The industry is also ready to commit for next three to four years that hundred percent import substitution can be done.
Today a base of 80 to 90 million PCs in India. We expect twenty five to thirty percent PC penetration considering Digital India program rolls out in the right timeframe. That means thrice the present PC penetration rate (approx. 10%) which calls for a huge case for manufacturing in India.
How is MAIT helping the government stakeholders' across the bouquet - Make in India, Digital India, Skill India, Startup India and others?
MAIT work is ongoing on all these fronts. Due to ITA, inversion and other issues the existing manufacturing died or slowed down. But we have been strong advocates of manufacturing in India since last three decades.
Make in India is a modern term but local manufacturing always existed. Even Digital India has been there in form of push for e-governance, computerisation etcetera. MAIT has contributed in not only making policies, but also talking to our members, companies, our counterparts outside India on various manufacturing related aspects. It is a continuous dialogue for effective development of the ecosystem development.
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