FICCI-EY Report calls for demand and supply side incentives to boost consumer electronics manufacturing to fulfil 'Make in India' objectives

FICCI and EY (Ernst & Young) has partnered to put forward policy recommendations to the government aimed at providing an impetus to the Consumer electronics manufacturing segment, thus driving the government's 'Make in India' agenda. In its report titled 'Indian Electronics Manufacturing', the industry voiced its readiness to invest in India to service local and international demand, but believes that certain areas still need to be addressed. The report elucidates these under Trade policy related, Tax and budget incentives, finance and ease of business related .

Mr. Som Mittal, Chairman, FICCI Electronics & White Goods Manufacturing Committee is optimistic at the prospects of manufacturing in India. We have an opportunity like never before to create a strong manufacturing base. We have the demand and the volumes needed. However to make it a reality the recommendations have to be implemented fast both in letter and spirit. Will work with the Government to make it happen he said.

 

The consumer electronics manufacturing industry is at an inflection point, poised to be on the cusp of exponential growth. We need to fix the industry basics and get our fair share of global manufacturing in consumer electronics. We should focus on policies that incentivize high value addition and specialisation leading to manufacturing of key components in India, said Mr. Malay Shah, Director- Advisory, EY India. An impetus from the government will also help in building hyperscale in assembly, which will propel India as a true export base, and set the industry on course to 'Make in India' aspiration for the sector, he added.

According to the report, the average localisation level across white goods is around 30-40% (considering the parts of the product manufactured in India). Manufacturers on their part are willing to invest in India and build it as a base for exports to MEA and SAARC regions. However in order to do so, the manufacturers face hurdles on the taxation aspects (duty structure, Free Trade Agreements etc.), cost of capital, under developed local supplier base, business infrastructure and ease of doing business.

Recommends trade policy initiatives such as expanding trade agreements with countries, providing deemed export status for pushing exports

Proposes expansion of government schemes to white goods (such as M-SIPs and PMA)

Suggests reforms on taxes such as excise (roll back from 12% to 10%), CST exemption for inter-state purchase of components and customs duty reduction on certain components

Pushes for incentivizing of local component manufacturing

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