MAIT: Inverted duty structure hindering the manufacturing activity

Inverted duty structure, which helps imported goods weigh on the domestically-manufactured goods, is the biggest bottleneck in the way of expanding electronics manufacturing activity in India. This is the reason why the new National Policy on Electronics (NPE) 2012 which was released in October 2012 has not been able to attract investor till date. It is a fear commonly shared in the industry.

Industry bodies like MAIT that represent the interests of the manufacturers in India are constantly vouching for addressing the inverted tax structure issue. "MAIT has been in constant touch with the finance ministry to address the issue of inverted tax structure. We're hopeful that the ministry will take into account the concerns and pay attention to the wishlist. If addressed, this will be a key for India's hardware manufacturing activity," shared Anwar Shirpurwala, executive director, MAIT (Manufacturers' Association for Information Technology).

The government is taking several steps to expand the manufacturing activity in India and is organizing roadshows in the US, Japan and South Korea to invite investors. Experts also fear that the new policy might lose its significance if associated issues like tax are not addressed in time.