Hardware sector needs a boost for India to be IT superpower: CII

CIOL Bureau
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NEW DELHI: The Confederation of Indian Industry (CII) has pointed out that India cannot aspire to be the IT Superpower it wishes to be, unless the hardware industry is given all the support it needs.


As a measure to provide a boost to the IT hardware sector, the CII has suggested that the depreciation rates of the IT hardware sector which is currently fixed at 60 per cent be increased to 100 per cent for the next financial year.

As far as the indirect taxes are concerned, CII has suggested that the excise duty on IT and IT related products should be reduced from 16 per cent to 8 per cent. The reduction of excise duty on all products would help in combating grey market, reducing price and give boost to demand, according to the Confederation.

Electronic and IT hardware sector, CII has reiterated, requires a conducive manufacturing environment. For a vibrant indigenous manufacturing base of IT hardware, it is necessary that customs duty on non-IT inputs used in IT should also be reduced to correct inverted tariff structure.

The Confederation has also urged the government to allow all capital goods, which do not have an indigenous angle, for the manufacture of IT and electronic components at nil customs duty. At present only 68 items of specified machinery and parts of machinery required for manufacture of semiconductors is exempted from customs duty.

CII has also stressed that the customs duty reduction on IT hardware items should be as per original schedule of IT Agreement which India joined in 1997 and should not be advanced from 2005 to 2003 as this would affect the indigenous hardware industry.

According to the agreement, customs tariff on IT items are to be brought down to zero. India has committed to bring down the tariffs on 217 bound items, out of which 95 lines are to be reduced to zero per cent by 2000, 4 lines in 2003, 2 lines in 2004 and the balance 116 lines in 2005. However, the finance ministry has been indicating that the schedule would be advanced to 2003.