As per industry estimates , India is expected to see an annual | |
demand of 300 million phones , 100 million laptops , 120 million | |
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US $ Billions ,%, 2014
Source : Observatory of economic complexity ; Team Analysis
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tablets & e-readers and 100 million dongles , to the tune of
USD 100 billion .
Providing a more facilitative environment in terms of supportive
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The import bill for IT electronics for the year 2014 comprised of approximately USD5 billion of PCs and another USD7 billion
8 for mobile phones . In unit terms , India manufactures only close to 2 % of the global IT electronics requirement .
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fiscal and physical policies to manufacturers of desktops , laptops and servers will provide the much needed boost to the manufacturing sector , in tune with the philosophy of ‘ Make in
India ’. It will also lend support to the software industry which is the mainstay behind India ’ s exports . India would have at least 5
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The IT hardware sector , more particularly the desktops , laptops |
billion connections by the year 2020 . This would necessitate |
and servers , is a “ creator ” as brought out in the following |
expansion of telecommunications networks and increase in |
exhibit : |
demand for various types of IT and telecom equipment . |
It is important to note that with the government ’ s favourable |
India ' s success in IT / ITES would never be complete and would |
policies and other growth drivers such as higher real |
not touch the lives of masses without commensurate growth of |
disposable incomes , easy consumer credit , falling prices of the |
electronics sector . Composite and integrated growth of both |
products and their increasing penetration and growing |
sectors – software and hardware , is the only route to make |
consumer and industrial base , there has been an increased |
India a global technology powerhouse . |
Experience in India has shown that there is still a disability cost |
Disability areas |
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compared to other markets around the world . Due to factors – |
The following are the disability areas in the Indian electronic |
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both fiscal & physical – manufacturing in other locations is |
system design and manufacturing that prevent its growth : |
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more viable and profitable when compared to manufacturing products in India .
Fiscal factors that are hampering manufacturing growth in
India are linked to the existing tax structure . This includes
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A . Taxation related disability a .
Differential Excise duty / CVD SAD on finished products b .
VAT on finished products
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central and state taxes that differ for products manufactured in |
c . |
Non creditable CST and Entry tax |
the country and finished products that are imported . Physical |
d . |
VAT credit reversal |
factors that are curbing manufacturing in the country include |
e . |
Blocked input VAT on goods used in provision of |
transformation costs such as operating expenses , regulatory |
services |
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expenses , labour , power , transportation , logistics , customs , and so on .
For the purpose of this Report , the overall disability has been considered to be the difference in the selling price of a product
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f .
Blocked Input taxes on certain inputs g .
Non-cenvatable Swachh Bharat Cess
B . Business environment disabilities
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manufactured in India ( Case 1 ) and the price of the |
a . |
Higher cost of finance |
same / similar product when imported ( Case 2 ), including all |
b . |
Poor domestic availability of components |
import taxes , as a percentage of the selling price of the |
c . |
Poor infrastructure |
product manufactured in the country . |
d . |
International marketing cost |
Disability has been broadly classified into disability due to tax structure and due to various other factors in the business environment . Disability due to tax is the difference in the overall taxes paid in India in Case 1 and Case 2 , as a percentage of selling price of domestically manufactured products . |
A . Taxation related disability
Disability due to tax is the difference in the overall taxes paid in
India when similar product is locally when manufactured and imported ( after offsets ) as a percentage of the selling price of products manufactured in the country . It is worth mentioning
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