Infrastructure Constrains Hindering the IT Sector Growth

Manufacturers' Association for Information Technology (MAIT), India's premier ICT hardware industry association hosted an exclusive press meet-cum-industry briefing to unveil the report, "Policy Interventions for Achieving 'Net Zero' Imports - IT-Electronics Sector".

The launch of the report featured an opening address by Mr Nitin Kunkolienker, Vice President, MAIT and Director, Smart link.

Speaking at the event, Mr Kunkolienker stated, "We have suggested to the Government of India some key policy and market interventions to achieve the vision of 'Net Zero Imports' and ignite a culture of domestic ICT and Electronics product manufacturing in the country. Within the manufacturing sector, the growth of the IT-ESDM industry is critical for realising the goals of 'Make in India' and 'Digital India' launched by the Government, and help establish India as a worldwide PC market by 2020."
"With the right measures there is potential to ramp up IT hardware production to US$ 2.6 billion within a year and put India firmly on the path to becoming a global ESDM supply chain hub," Mr Kunkolienker added.

Urgent steps to address Fiscal and Market anomalies can enable doubling of IT hardware production in one year to US$ 2.6 billion, help to achieve the vision of 'Net Zero Imports' of ICT and Electronics hardware products by 2020, establish India as a global ESDM supply hub. 

Favourable duty differential regime can potentially generate 10,56,000 jobs in India IT manufacturing and related services, if estimated annual demand for21 million PCs by 2020 is fulfilled entirely through domestic production and the country garners a 30% global market share

The study seeks to highlight that compared to other low cost jurisdictions, India poses some disabilities for IT-ESDM manufacturers. The cost of manufacturing is estimated to be higher in India vis-à-vis other global hubs. These are on account of physical factors such as higher costs of power, real estate, logistics, additional expenses on account of freight, as well as fiscal factors. India has a multitude of taxes and duties imposed by both the Central and State Governments. Because of their flawed structure, these taxes often discriminate against domestically manufactured products.

Therefore, the current study was designed to analyze in-depth the state of the IT hardware manufacturing sector in India, with special emphasis on desktop PCs, laptop PCs and servers, identifying inherent drawbacks when compared with China, Taiwan and other East Asian countries. Further, the study findings propose tax policy interventions in the immediate and short term that can lower the disabilities, reignite the growth in this sector and help it to contribute to India's vision of 'Make in India' and 'Net Zero Imports'.

The event also featured brief sessions by industry stalwarts Mr. Krishnakumar P, Vice President, MAIT and Vice President-Consumer and SMB, Dell India; Mr. Sandeep Aurora, Director-Marketing and Market Development, Intel India/South Asia; Mr. Rahul Agarwal, Managing Director, Lenovo India, and Mr. Priyadarshi Mohapatra, Country General Manager-CCG, Microsoft India.