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:
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.
MAIT is committed to working with the Government to realise its goal of India breaking into the top 50 countries on the World Bank’s index on ‘Ease of Doing Business’ ranking from its current position of 63. For this, it is imperative that the government and the industry work in unison to develop policies that are progressive, cohesive and conducive. While we work on policy advocacy with the decision makers, it is also MAIT’s endeavour to ensure that the on-ground implementation of these guidelines is efficient and effective. Often execution is a challenge and procedural and process changes are required to be made to increase productivity. On the one hand, those implementing the policy need to be trained to understand its objective and not to give unnecessary importance to minor discrepancies. On the other hand, the industry needs to be guided on making the distinction between an issue of governance (merely a grievance) and a policy issue which hampers Ease of Doing Business.
In order to architect the improvement of Ease of Doing Business index, MAIT recommends the following:
Industry should be conferred with before any policy is put in place so as to gain further insights, seek advice and work around possible issues. Emphasis needs to be made on globally accepted best practices being made mandatory. MAIT recommends that policy drafts and proposed changes are made available in the public domain for a reasonable time period before it is made the body of law.
India still reels under the pressure of the license raj and many of our issues are systemic. The manufacturing sector relies heavily on the timely, physical movement of goods, and therefore is the worst affected by regulation. On an average, a manufacturing unit needs to comply with nearly 70 laws and regulations, file 100 returns a year, and comply with multiple inspections. Taxation issues are encumbering the sector with a plethora of pending litigations, wasting precious government resources. MAIT is consistently involving the government and all relevant stakeholders in workshops to help establish a single clearance window for the electronics manufacturing sector.
As it stands, with regard to import of IT products, different importers adopt different classifications for the same set of products, owing to no specific classification available in the Customs Tariff. Leaving the decision on customs field officers to use their discretion often leads to delays, especially detrimental to an industry where the time span for obsolesce is limited. MAIT is working with the government to set up a convergence cell, wherein the classification of new IT products should be decided within 30 days of representation.
There is a massive disconnect between the centre and state with respect to clarity of sector specific policies and integration of investment incentives. MAIT proposes that a Central Investment Facilitation Window is set up to simplify this process and encourage business continuity.
MAIT endorses the setting up of an electronics supply chain portal where buyers and sellers can forge alliances and integrate with one another. The solution will deploy intelligent recommendation engines to facilitate the best-suited supply chain alliances and connect the global and local manufacturing ecosystem.
MAIT is actively connecting with the industry and the government to create increased demand for electronics, as both sides stand to gain. Increased technology proliferation is the only catalyst to spur India into a digital and knowledge economy.
Essentially, there are two ways to achieve this:
Despite the fact that there is demand for electronics, it exists in silos, at this point. There is an urgent need to consolidate this demand to realise economic and social benefits. MAIT positions demand generation in conjunction with demand aggregation. There is a growing need to collate the requirements of the centre and as well as the states and create a depository of demand. This will support more manufacturing and create a pricing advantages.
There are a fair number of bottlenecks that exist with respect to government procurement, and these are being addressed by MAIT. Procurement needs to be streamlined and improvised, so that locally manufactured products are obtained easily by government agencies. The government is one of the largest buyers for the industry and consolidation of orders will result in huge cost-savings. In order to achieve this goal, the Government’s e-Marketplace GeM, has been set up. Going forward, state governments also need to integrate with GeM.
While promoting indigenous manufacturers, steps need to be taken to simultaneously encourage MNCs to invest in the country and for this, their business needs must be taken into consideration. MAIT is consistently looking at balancing the requirements of both SMEs as well as MNCs in all our representations with the government.