DGFT to boost set top box manufacturing in India

NEW DELHI, INDIA: Director General Foreign Trade (DGFT) Dr Anup Pujari today informed that all items suggested by the IT department had been notified for an additional 2 per cent incentive and that Set Top Box has been identified as a focus product.

Giving the inaugural address at a seminar on 'Set Top Box - Making India a Manufacturing Hub' organized by the Confederation of Indian Industry (CII) here today, Dr Pujari asked stakeholders to brainstorm and advise him on third party certification that will enable and facilitate trade, citing the example of FDA approval for drug manufacturers.

Participants felt that the timing of the seminar was most opportune as cable TV networks in India have been mandated to go digital by December 2014. This entails that the TV signal may be received only through Set Top Boxes (STB).

Speaking about the digitalization process, Supriya Sahu, Joint Secretary, Ministry of Information & Broadcasting, said that it was envisioned that 75 million STBs would be required for Phase 3 and Phase 4. She assured the participants that the government would look at their suggestions for tax rationalization but urged them to rise to the occasion so that this huge opportunity could be utilized as there was a very short time window.

Globally too, most countries have a roadmap to go digital in the next 3-5 years. Expected demand globally for set top boxes is around USD 12 billion. The STB manufacturing opportunity has been identified as amongst the growth drivers for the electronics manufacturing industry.

Keith Cochran, VP (Digital Home sector), Jabil Circuits Inc, noted that India has to revisit its tax policy structure if it wants to attract investment in this area. Competing countries, he said, were offering both discretionary and statutory incentives to attract long term investment.

Apart from tax incentives, he suggested the government must also offer special incentives for supply chain manufacturers and extend incentives to R&D and design functions to promote expansion of the available market.

Many players in Indian electronics industry have developed set top boxes which are cost competitive and meet the technological requirement of the customers.

Dr Ajay Kumar, Joint Secretary, DeitY, Ministry of Communication & IT, informed that the department was announcing a series of incentives for the electronics manufacturing cluster scheme and assured the participants that set top boxes was a priority area given the speed of the cable digitalization process. He mentioned that an Indian CAS can be expected in the next 12-14 months.

Earlier, Vinod Sharma, chairman, CII National Committee on ICTE Manufacturing & Managing Director, Deki Electronics Ltd, set the tone for the discussions by stating that manufacturing, finance and policy all had to be strong so that the opportunity presented by digitalization does not go waste.

He informed that the trade deficit on this one item alone was $360 million last year. Success in business, he said, was a result of reinforcement of the strengths of entrepreneur, enablers and business drivers.

Sunil Vachani, CMD, Dixon Technologies (India) Pvt Ltd & Honorary Treasurer of CEAMA, outlined the advantages that Indian manufacturers gave to MSO operators and DTH service providers without any compromise on quality. In his closing remarks, he also stressed that the duty increase did not adequately compensate for other disability factors which were denying Indian manufacturers the competitive edge.

The seminar was attended by key officials from concerned Government Ministries and Departments, MSO operators, DTH service providers, chipset suppliers, STB manufacturers, and representatives of ecosystem industries among others.