MAIT pins hope on EXIM Policy

NEW DELHI: In its first post budget address, MAIT, the apex

body representing the hardware, training and services sectors of the IT industry

in the country, today shared the details of the implications of the recently

announced Union Budget on the Indian IT industry. It also talked about the IT

Industry’s expectations from the forthcoming EXIM Policy.

Elaborating on the details of the budget, MAIT president

Vinay Deshpande said, "There is no room for price reduction for any IT

products manufactured in India — be it by domestic players or MNCs." Due

to the removal of surcharge on the basic customs duty, the scope of price

reduction for high-end finished goods imports like servers and notebooks is a

meager 1.3 per cent. MAIT has been asking for reduction in excise duty to 8 per

cent from the existing 16 per cent for almost 3 years now. However, the mood in

the ministry is to move towards VAT in the next couple of years with a single

rate of 16 per cent, Deshpande added.

The IT hardware and manufacturing sectors have been looking

forward to policy measures from the government to enable the sustainable

manufacturing in the IT sector and reduction in prices of IT products for

increased penetration.

Speaking on the issue of hardware manufacturing, Deshpande

said the most feasible solution under the current circumstances would be to

create Special Economic Zones (SEZs) for the hardware sector and making the

necessary modifications in the Electronic Hardware Technology Park (EHTP)

scheme. Commenting on his expectations from the EXIM Policy MAIT director,

Vinnie Mehta said, "The Ministry of Commerce has been very supportive of

the MAIT recommendations and we are expecting a favorable EXIM Policy."

The EXIM Policy is also expected to focus on modification of

labour laws, encouraging R&D for the global market and non-IT hardware,

security electronics, electronic toys, intelligent manufacturing and automotive

electronics.

"MAIT has recommended that the condition for compliance

with Net Foreign Exchange Positive (NFEP) condition in the SEZs and the EHTP be

removed. This would accord the necessary flexibility to the entrepreneurs to

decide the markets in which they wish to sell. Further, we have also recommended

that the facility of concessional access to the domestic market be withdrawn,

which means the industry will have to pay the full rate of customs duty and all

other local levies when the finished products are sold in the domestic market.

This would ensure that the government does not lose any revenue due to free

import of inputs and components," added Mehta.