India can emerge as a more attractive market for consumer durables than China if the government provides tax benefits and develop large multi- product special economic zones, says a study.
The study by industry body FICCI and financial consultancy company Pricewaterhouse Coopers (PwC) suggested tax rebates for high-end technology companies that set up research and development (R&D) centres in India.
"Tax incentives could include exemption of customs duty on any import, exemption of excise duty and VAT on inputs required for setting up R&D centres," the study said.
The National Manufacturing Competitiveness Council (NMCC) has entrusted PwC and FICCI to conduct the study.
During the last decade, China has been successful in developing large home-grown companies and has grown into a large manufacturing hub for consumer durables, NMCC Chairman V Krishnamurthy said.
Consumer durables manufacturing in India is constrained by absence of well-developed supplier base, he said. "We have to incentivise domestic value addition and focus on developing vendor base and raw material supply."
The study said that the government should reduce overall tax levels and simplify tax structure. It also said that large SEZs similar to China's with good infrastructure should be encouraged by the government.