GoIs Gift to ICT

Indian ICT hardware and electronics manufacturing segment
is rejoicing over a gift that the Ministry of Commerce and Industry has bestowed
on it by including 128 technology products from the industry in the Market
Linked Focus Product Scheme.

"As a consequence of the recession during the last two
years, Indian industry faced a severe downturn in its performance and exports.
The special support provided through the Market Linked Focus Product Scheme is
indeed welcome and the electronic component industry is relieved to see that
quite a few components such as PCBs, relays, capacitors, resistors, rectifiers
have been included in the scheme," says Rajoo Goel, general secretary, ELCINA
Electronics Industries Association of India.

This will give a boost to the industry, though only for a
short period of six months and hopefully we will have breathing space to recover
from the losses incurred during the recession," he adds.

The sop, equivalent to 2% of the export value, is
available for six months starting from April 1, 2010. Under this scheme, the
government will issue a credit scrip for exporters which can be used to pay duty
and can be sold in open markets as well. Some of the IT and electronic products
that have been added under MLFP include desktops, notebooks, unpopulated printed
circuit boards, semiconductor devices, capacitors, resistors, LEDs, color TV
sets and others under HS code 85.

"This is a great encouragement for manufacturers and
exporters in the country. This will help companies in offsetting the
disadvantage that Indian manufacturers have manufacturers in other countries,"
says Vinnie Mehta, executive director, Manufacturers Association for
Information Technology (MAIT).

"Manufacturing in India is expensive by 8-20% compared to
the cost of manufacturing in some of the competitive destinations. The
government has given incentive of 2%, which is significant for most segments,
where difference in the margin is close to 5%," he adds.

According to Mehta, these recommendations were made in the
IT Taskforce report. "I am delighted that the government has accepted some
recommendations from the IT Taskforce report. We are looking forward to the day
when the government accepts all our proposals submitted in this report," says
Mehta.

Government of India noticed that export of IT and
electronic products showed a decline of 28.6% as compared to exports between
April and February in the previous year, hence it was decided to include 128 IT
and electronic products out of 200 new entries under MLFPS.

This is an area of concern and the government has
indicated that it is seriously considering measures to promote manufacturing,
especially in the technology sector. Even Anand Sharma, Union Minister for
Commerce and Industry, at a session organized by CII, expressed his willingness
to see the technology sector, especially manufacturing, booming in India.

"National manufacturing policy is an issue very close to
my heart because of two reasons. First, why dont we have it? Many countries
think that India will fail to catch up with new technologies and will be left
behind by another decade. We will not let this happen. We will provide
incentives for investment and create a national technology zone for new
technologies. We have a dream to make India the factory of the world," says
Sharma.

Prasoon Srivastava/CIOL

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