Draft policy seeks to make India global electronics and IT hardware hub
Exporters of electronics and infotech hardware may get a 10-year tax holiday. According to the draft of the National Electronics/IT Hardware Manufacturing Policy, prepared by the government, this will help promote India as a key hardware manufacturing destination.
To encourage domestic production, the draft also proposes to exempt the import of capital goods and raw materials needed for the manufacture of electronic components from Customs duty.
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The policy also envisages a core group, representing various ministries, to look into the problems of electronics and IT hardware exporters.
Further, sales tax and the proposed value-added tax on all electronic and IT products, including components, will be fixed at 4 per cent, while the special additional duty on imports will be phased out.
The policy also proposes special incentives, similar to those given to special economic zones, for hardware parks in the private sector, like duty-free facilities and income-tax benefits under Section 80IA.
To attract global chip manufacturers like Intel to India, companies would be given cash subsidy and tax incentives, the draft proposed.
The policy, prepared with an eye at promoting an export-oriented hardware sector, also suggested an export plan that would help identify target countries and products.