MAIT uses its capabilities and expertise and acts as a partner to the industry as well as the government, to help overcome impediments that prevent India from taking its rightful place as a leader in the IT hardware manufacturing sector.
The manufacturing opportunity for India is tremendous as labour costs in China are rising, and manufacturing is shifting out. In order to leverage this development, MAIT is working with the government and industry to take definitive steps and improve India’s manufacturing ecosystem, while also removing the barriers that currently discourage exports. MAIT plays the role of a growth accelerator and promotes manufacturing through incentives that boost the concept of ‘India for the World’ and not just an ‘India for India’ strategy.
We have shaped our manufacturing strategy on four levels, in order to deliver long term value to all our stakeholders:
- Be the catalyst to change current policy from capex-based incentives to throughput incentives: To enable a robust electronics manufacturing framework, MAIT is urging the government to make a shift from providing capex-based incentives to making them throughput, based on what is being manufactured and the extent of value addition by a manufacturing unit. In fact, MAIT feels that production subsidy must be extended to include all components as well as raw materials. So far, electronics manufacturing has seen the rise of SKD (Semi-knocked Down) manufacturing units. Despite several fiscal incentives, the Governments’ objective of spurring growth of CKD (Completely Knocked Down) units has not come to fruition. At present, value addition within the country is at 5-10 % and India is looking at building a robust value chain with 20-25% of domestic content by the year 2020.
- Drive for the establishment of component trading hubs and bonded warehouses: Another fundamental task at hand is to establish component trading hubs or bonded cargo warehouses, encouraging domestic manufacturers to procure components from these hubs. MAIT is consistently participating in discussions with the government in this regard.
- Push for an export-oriented approach by increasing the MEIS rate to incentivise domestic manufacturing: An export-oriented approach can be achieved by increasing the Merchandise Export from India Scheme (MEIS) rate to incentivise domestic manufacturing, provide throughput-based incentive, increase basic customs duty rates for select non-ITA goods and promote PCBA manufacturing in India. MAIT is also looking at ways to curb imports so as to empower electronics manufacturers to cater to local demand.
- Promote local value addition by boosting the role of SMEs: As India looks to become self-sufficient in electronic manufacturing and propagate more local value addition, it is extremely important that we engage and empower Small and Medium-sized Enterprises (SMEs). MAIT has a strong representation of SME players amongst its members and we are committed to representing their petitions to the government.
Towards realising our goals, MAIT is actively involved in mobilising the industry through the setting up of various committees with specific tasks, drafting representations to the government, organising round tables, conferences and seminars to bring the government, industry and other stakeholders together.