Indian High Tech Sector Can Attract $21 Billion in Investment: ReportSeptember 11, 2019 17:09
(Image source from: Moneycontrol)
A top American advocacy group in a recent report said India’s high tech sectors have to potential to attract a whopping USD 21 billion in investment and create millions of jobs over the next five years.
The United States-India Strategic and Partnership Forum (USISPF) said: “Hi-tech Manufacturing in India”, submitted to the Indian government, stated that India's high-tech sectors can create 550,000 direct jobs and 1,400,000 indirect jobs over the next five years.
The report is released on the basis of feedback received from top American firms in this sector interested in investing in India.
“India's high-tech sectors (such as electronics, aviation, medical devices) have the potential to offer an additional investment of USD21 billion and create 550,000 direct jobs and 1,400,000 indirect jobs over the next 5 years,” USISPF president Mukesh Aghi said.
“Industry looks forward to working with the government to make India a world-class manufacturing hub that can strengthen domestic manufacturing as well as support India's export sector to create the much-needed jobs for Indians,” he said.
According to the report, though the aerospace, electronics, and medical device sectors have witnessed the arrival of various global multinational firms in India for manufacturing, the country’s share in global production within these areas is not more than three percent.
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The report came after USISPF's initiative consisting of senior global executives from various industries to create a set of recommendations as India advances a hi-tech manufacturing ecosystem in the country.
In addition, the study also examines the factors that are impacting India’s competitiveness for companies planning to set up manufacturing operations in the country, and in what way these challenges can be dealt with to make the country a dynamic player in the global value chain.
The need for a strong supplier ecosystem, reduction in logistics cost, enhance the skilled workforce, and enabling regulatory policies are some of the major challenges identified, Aghi said.
The report also sought to broaden of Goods and Services Tax (GST) coverage by bringing in products/sectors presently excluded from it to help cut down the cascading impact of taxes and manufacturing cost.
“In the interim refund of indirect tax on above items and GST on supplies ineligible for credit to be provided for improving cost competitiveness,” the report recommended as it also sought higher tax benefits for research and development in these sectors.
The report recommends consistency in policies and expediting of approval processes. It also suggests competitive bidding for government acquisition and enforcement mechanism to make sure that central and state governments are aligned.
For the electronics sector, the report recommends the uniform structure of duty across commodities by doing away with oddities in HSN, appropriate classification of products and as indicated in the Information Technology Agreement the continued exemption in the form of zero duty for routers and other products.
The report as well as urges to link preferential market access (PMA) to exports and rationalize local value-addition norms for the accomplishable targets.
By Sowmya Sangam