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KAMAL NATH CALLS FOR STRENGTHENING INDIA’S MANUFACTURING BASE IN ELECTRONICS ELECTRONICS AND HARDWARE MANUFACTURING IDENTIFIED AS THRUST AREAS – BIGGER PACKAGE OF INCENTIVES ON THE ANVIL 27TH ANNUAL FUNCTION OF CETMA

Date : 03 Nov 2006
Location : New Delhi
 

KAMAL NATH CALLS FOR STRENGTHENING INDIA’S MANUFACTURING BASE IN ELECTRONICS
ELECTRONICS AND HARDWARE MANUFACTURING IDENTIFIED AS THRUST AREAS – BIGGER PACKAGE OF INCENTIVES ON THE ANVIL
27TH ANNUAL FUNCTION OF CETMA

New Delhi: November 03, 2006

Shri Kamal Nath, Union Minister of Commerce & Industry, today called for strengthening India’s manufacturing base in electronics so that the country could excel in both electronics hardware and software sectors. The Consumer Electronic Sector, which is the main stay of the Indian electronics industry, contributes about 35% of the total electronic hardware production in India and colour TVs are the largest contributor to this sector. This Sector is also currently undergoing technological revolution.

Addressing the 27th annual function of the Consumer Electronics and TV Manufacturers Association (CETMA) here this evening, Shri Kamal Nath emphasised the importance of electronics and hardware manufacturing as a thrust area, and indicated that the government was considering a bigger package of fiscal and other incentives for electronics and IT hardware manufacturing sector with the following main objectives viz., to make the industry globally competitive; to attract more FDI in the industry; to bring down the prices of the end products; to reduce production cost; to step up volumes to take advantage of economies and efficiencies of scale; to increase the demand; to compensate for disabilities until the basic infrastructure constraints are removed; and to move towards much lower taxation levels in the next 3-5 years.

The Indian electronic sector faces stiff challenges in the international market, as it has to overcome infrastructural constraints leading to high operational costs. There is also a need for forward and backward integration of hardware and software sectors to take advantage of India’s burgeoning software sector, the Minister stressed, adding that India had been meeting more than half of its electronics hardware requirements through imports.

“In view of the special characteristics of Electronics/IT Hardware sector, the challenge posed by the WTO stipulation for elimination of duties in this segment and India entering into FTAs/PTAs with a number of countries/trading blocks, this sector needs a special sectoral treatment rather than being governed by general policy framework. As a result of the efforts taken by the Department, India has become a major destination for FDI investments in Information Communication Technology Sector”, he said.

He also mentioned that the Electronics Hardware Technology Parks (EHTP) and the Special Economic Zones (SEZs) were tailored to boost manufacturing in the country. “SEZ policy provides appropriate environment for setting up of Information Technology / Information Technology Enabled Services SEZ including SEZs for Electronics Hardware manufacturing”, he added.

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