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The Centre on Wednesday announced exemption to the <keyword id="6355449" type="UNKNOWN" weightage="20" keywordseo="information">information</keyword> and technology (IT) <keyword id="6354887" type="UNKNOWN" weightage="20" keywordseo="Industry">industry</keyword>, along with certain other sectors from the lockdown, with certain conditions. As per an order by the Ministry or Home Affairs, IT and IT-enabled services with 50 per cent strength can start work from April 20. Further, the suspension has also been lifted from industries in IT hardware manufacturing companies. Players in the IT sector have welcomed the move and are also of the view that their business strategy would also need to be changed in the current scenario. Neelesh Kripalani, Senior Vice President and Head, Center of Excellence (CoE) at Clover Infotech, said that due to the social distancing and lockdown being witnessed in almost all countries of the world, the demand for moving business-critical workload to the cloud is on the rise. Workloads on the cloud can be easily accessed and managed across the organisation. "This is an apt time for businesses to move their <keyword id="6355821" type="UNKNOWN" weightage="20" keywordseo="application">application</keyword> and the underlying infrastructure to the cloud and reap the benefits of increased speed, efficiency and agility. This gives businesses the assurance that their core application and operations are functioning seamlessly," he said. <keyword id="4039369" type="PERSON" weightage="20" keywordseo="parag-naik">Parag Naik</keyword>, Co-Founder and CEO, <keyword id="4039367" type="PERSON" weightage="20" keywordseo="saankhya">Saankhya</keyword> La, said that the very first priority should be to ramp up investments in the telecom and electronic equipment industry. "We should not just look at investments from MNCs, however the government should focus on making policies that encourage local SMEs and MSMEs to ramp up investments." This can be done by incentivizing these companies to build a local ecosystem, he said. "Apart from the setting up of factories and manufacturing units, the need of the hour is to invest in innovation. Countries like China and US dominate the market because they have a large bank of IPs. If India has to compete on the global scale, we have to ramp up domestic innovation. We have a great demographic dividend and we can certainly use it to innovate and build an IPR regime," Naik said. On the decision to partially lift the restrictions on the IT hardware industry, MAIT, the industry body for information and communications technology, said that the decision was the need of the hour as the country would have to turn towards imports to satisfy its domestic demand. <keyword id="3265192" type="PERSON" weightage="20" keywordseo="Nitin-Kunkolienker">Nitin Kunkolienker</keyword>, President, MAIT said: "This move was the need of the hour as all digital and communication highways are built using electronic and ICT products. This was extremely essential as all utilities need these products otherwise imports would have catered to this pent up demand for ICT products estimated at $2.5 billion per month." MAIT had been urging the government to include manufacturing, sales, and servicing of ICT products, including mobile phones in essential services at a time when reliance on such products and services hasincreased due to the lockdown. --IANS rrb/sn/vd

IT sector gets relief with partial work resumption from April 20

New Delhi, Feb 1 () Imported mobile phones and chargers may cost 1-2 per cent more as the government on Saturday announced increasing customs duty by 5-10 per cent.
 But industry observers say the hike in import duty will not affect consumers at large, as nearly 97 per cent of mobile market requirements is being met through domestic production.
 The government has also announced that it will come up with a new scheme to encourage domestic manufacturing of mobile phones, electronic equipment and semiconductor packaging in order to make India a part of the global manufacturing chain and boost employment opportunities.
 "Under Make in India initiative, well laid out customs duty rates were pre-announced for items like mobile phones, electric vehicles and their components. This has ensured gradual increase in domestic value addition capacity in India. Customs duty rates are being revised on electric vehicles, and parts of mobiles as part of such carefully conceived Phased Manufacturing Plans," Finance Minister Nirmala Sitharaman said in the Budget speech.
 Mobile phones were earlier exempted from 10 per cent service welfare cess but it will now be re-imposed on imported handsets over and above existing 20 per cent basic customs duty.
 The hike in import duty will not affect consumers in India much because 97 per cent of mobile market requirements is being met through domestic production, according to industry experts.
 The finance minister announced increase in duty on chargers from 15 per cent to 20 per cent, motherboard from 10 per cent to 20 per cent and in similar range for other components used in manufacturing of mobile phones.
 The government, however, deferred imposition of import duty on touch panels and cover glass for mobile phones to October 1, 2020 instead of April 1, 2020 as was envisaged in the phased manufacturing plans.
 "Regarding the duty increase on PCBA (motherboards) from 10 per cent to 20 per cent and chargers from 15 per cent to 20 per cent, India has already built very large capacities. This change will lead to further manufacturing of 10 crore plus PCBAs and 5 crore-plus chargers in India," ICEA Chairman Pankaj Mohindroo said.
 Vivo India Director for Brand Strategy Nipun Marya said: "We established our manufacturing facility in the first year of our operations in India. In 2019, we had successfully integrated SMT lines (assembly lines) in our facility in Greater Noida, and ever since have been manufacturing PCBs (motherboard) there".
 According to Counterpoint Research, Vivo was second largest smartpone player in the last quarter of 2019 in terms of sales with 21 per cent market share.
 India has also started exporting chargers for both mobile phones and laptops. It is estimated that domestic charger production in India is to the tune of Rs 1 lakh crore. The fresh import duty may encourage production of another Rs 5,000 crore worth of chargers.
 "Increase in import duty of mobile phone components such as display panel, touch panel, microphone, receiver and printed-circuit- board to 10 per cent from nil, will ensure further Indianisation of products and increase intensity of production in India," EY emerging markets TMT leader Prashant Singhal said.
 The government's decision to crackdown on non genuine imports under free trade agreement is expected to give further boost to manufacturing of mobile and electronic products.
 IT hardware body MAIT appreciated incentives in the Budget for mobile phone industry.
 MAIT President Nitin Kunkolienker suggested that "the government needs to include IT, Datacom, Medical and other subsectors of electronics. While the scheme is still in the works this will result in rise in exports from India."
 He said the government's announcement to support setting up of data centers will have direct impact in spurring demand for networking products and servers.
 "The new proposed scheme to promote domestic electronic manufacturing must include networking and servers. The other aspect of this measure is it is setting the back end foundation for small cell 5G network. Which when it comes will again result in demand for networking products," Kunkolienker said.
 The government has also proposed increase in import duty on mobile base station by 10 per cent which is expected to make deployment of telecom network in the country expensive as over 90 per cent of telecom network gears are currently imported.
 "Emphasis on Make In India and preferential market access compliant products would help India achieve better results rather than by giving incentives for assembly in India," PHD Chamber of Commerce and Industry, telecom committee head, Sandeep Aggarwal said. PRS SR MBI PRS ANU
ANU

Customs duty hike to make imported mobile phones, chargers slightly expensive

<ul><li>The ₹50,000 crore production linked incentive (PLI) scheme primarily targets mobile manufacturers, with more than 80% earmarked for them.</li><li>India’s IT Minister expects that this scheme will lead to an investment of ₹20 lakh crore and generate 25 lakh employment opportunities over the next five years.</li><li>Industry bodies and electronics manufacturers welcomed the move, saying that this will help in creating an exports market.</li></ul>The Indian government has unveiled a ₹50,000 crore scheme to bring electronics manufacturing to the country. This move is aimed at making India a global manufacturing hub for electronics and encouraging investments. As part of this scheme, ₹40,000 crore has been earmarked as production linked incentives (PLI) for mobile manufacturing activities. “The schemes would also provide a fillip to sagging investment sentiment in the wake of the ongoing COVID-19 pandemic. The timing of these guidelines is significant as it can act as a catalyst in Government’s efforts to promote India as an alternative to China in becoming a global manufacturing hub for electronics manufacturing.” said a report by Nangia Andersen. What are these production linked incentives? Production linked incentives (PLI) are awarded to companies which make an application to the government to take part in the scheme. Based on the scheme details, these PLIs go up to 6% and companies will have to reach the minimum threshold limits in terms of investment and sales. These PLIs will be offered for five years after the year in which the application has been made. The thresholds to avail these incentives are low, too, suggesting that the government is serious about attracting as much investment as possible. <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Segment </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Total investment (over 4 years) </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Total sales (over 5 years) </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Mobile phones (non-domestic companies) </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹1,000 crore </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹25,000 crore </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Mobile phones (domestic companies) </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹200 crore </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹5,000 crore </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">Specified electronic components </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹100 crore </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:bottom;background-color:#d9d9d9;padding:0pt 5.75pt 0pt 5.75pt;overflow:hidden;overflow-wrap:break-word;">₹600 crore </td></tr></tbody></table> Source: MeiTY, The PLIs are fixed at 6% for the 1st and 2nd year, 5% for the 3rd and 4th years and 4% for the 5th year. This should encourage companies to increase production as much as possible in the first two years, or at least in the first four years, as the incentive rates are comparatively higher. “These schemes shall also provide immense support to the Prime Minister’s appeal to structure economic revival in India by making the economy self reliant, i.e., Atmanirbhar.” added the report. India expects big investments In an announcement on June 1, India’s IT and Telecom minister Ravi Shankar Prasad said that the government will initially try to attract the top five mobile manufacturing companies. While making the announcement, Prasad <a href="https://economictimes.indiatimes.com/industry/cons-products/electronics/government-notifies-three-incentives-schemes-worth-rs-48000-crore-for-electronics-manufacturing-push/articleshow/74935465.cms?from=mdr">said</a> that the government expects to bring in investments worth ₹20 lakh crore and provide employment to 25 lakh people over the course of next five years. <div type="Article" hostid="261" msid="73834403" title="Government to announce new policy to encourage domestic manufacturing of mobile phones and electronic equipment" mstype="2" mssubtype="0"></div> Industry welcomes the move “The newly introduced schemes by the Ministry of Electronics and IT (MietY) are a welcome move and will give India an opportunity to boost local handset production leading to an increase in export-led manufacturing moving forward,” Xiaomi India’s Chief Operating Officer, Muralikrishnan B was quoted by ET. “The mobile manufacturing industry is very positive about the move and this scheme will help meet the targets under National Policy on Electronics 2019,” <a href="https://economictimes.indiatimes.com/tech/hardware/govt-starts-inviting-application-for-rs-50000-cr-electronic-incentive-schemes/articleshow/76153644.cms">said</a> Nitin Kunkolienker, President, Manufacturers Association for Information Technology. “We believe many Indian champions will be born out of this push by the government not only for catering to domestic demand but also supplying to global markets,” <a href="https://telecom.economictimes.indiatimes.com/news/pli-scheme-to-boost-growth-in-mobile-phone-manufacturing-in-india-handset-makers-body/76157452">said</a> Sunil Vachani, Managing Director, Dixon Technologies, which makes TVs for Xiaomi and phones for Samsung. SEE ALSO: <a href="https://www.businessinsider.in/india/news/fm-nirmala-sitaraman-announces-six-steps-for-msme-sector/articleshow/75717258.cms">Finance Minister Nirmala Sitharaman announces six measures for the MSME sector</a> <a href="https://www.businessinsider.in/science/news/india-opens-nuclear-energy-for-private-players-but-for-cancer-research-and-consumer-applications/articleshow/75776354.cms">India opens nuclear energy space to private players but for cancer research and other consumer applications only</a> <a href="https://www.businessinsider.in/stock-market/markets/news/foreign-investors-fpi-sold-shares-despite-modi-20-lakh-crore-stimulus/articleshow/75807397.cms">Foreign investors sold shares worth over a billion dollars in the last four trading days⁠ while India was unveiling its ₹20 lakh crore stimulus</a>

Inside India’s ₹50,000 crore scheme to woo electronics manufacturing including smartphones

New Delhi, Mar 21 () The Union Cabinet has cleared three schemes involving a total incentive of around Rs 48,000 crore to boost electronics manufacturing in the country, Telecom and IT Minister Ravi Shankar Prasad said on Saturday.The government is expecting to generate manufacturing revenue potential of Rs 10 lakh crore and create direct and indirect jobs for 20 lakh people by 2025 through these schemes, he said.Besides this, the Cabinet in its meeting held on Friday also approved incentives for medical devices to reduce dependency on import of electronic products for medical care in the country. "Two long-term policy decisions have been taken to make India a big hub of manufacturing. First in case of electronics, second in case of pharma and also medical devices. Cabinet has approved production linked-incentive for electronics companies. We will give Rs 40,995 crore in the coming five years for production linked-incentive," Prasad said.Under the scheme, electronic manufacturing companies will get an incentive of 4 to 6 per cent on incremental sales (over base year) of goods manufactured in India and covered under target segments, to eligible companies over a period of next 5 years.Industry body India Cellular and Electronics Association said that the PLI scheme is of global scale which not only spur manufacturing but more importantly exports of mobile handsets at a global scale. "The National Policy for Electronics 2019 envisions India to reach a mobile phone production of USD 190 billion by 2025, of which USD 110 billion would be exported. PLI is the policy intervention to support the ambition to build the electronics sector, where the main focus remains on manufacturing of mobile phones and components," ICEA Chairman Pankaj Mohindroo said.The Cabinet approved scheme for promotion of manufacturing of electronics components and semiconductors with a budget outlay of Rs 3,285 crore spread over a period of 8 years. It also approved revised version for electronics manufacturing clusters with a total incentive outlay of Rs 3,762.25 crore spread over a period of 8 years with an objective to create 10 lakh direct and indirect jobs under the scheme. "Because of these three schemes, we hope to generate manufacturing revenue potential of Rs 10 lakh crore by 2025 and generate direct and indirect jobs for 20 lakh people," Prasad said. The government estimates that PLI scheme, domestic value addition for mobile phones is expected to rise to 35-40 per cent by 2025 from the current level of 20-25 per cent and generate additional 8 lakh jobs, both direct and indirect."This incentive is linked to production and investment in India. We also make 3-4 Indian companies also champion companies," Prasad said.The government estimates that push for manufacturing of electronics components and electronic chips with create around 6 lakh direct and indirect jobs."If India has to progress in the field of electronics then it should also become a centre for component manufacturing for electronics, telecommunications, consumer electronic, medical electronics, strategic electronics etc. This is investment in the downstream value chain. We will give 25 per cent incentive on capital expenditure," Prasad said.The EMC 2.0 scheme will provide financial assistance upto 50 per cent of the project cost subject to a ceiling of Rs 70 crore per 100 acres of land for setting up of Electronics Manufacturing Cluster projects. "Electronic manufacturing clusters will be spread in an area of 200 acres across India and 100 acres in North East part of the country. Whoever will make investment of Rs 300 crore under this scheme will be given incentives," Prasad said. The minister said that the production of mobile phones in the country has gone up 8 times in last 4 years from around Rs 18,900 crore in 2014-15 to Rs 1.7 lakh crore in 2018-19 and the domestic demand is almost completely being met out of domestic production. "It is extremely critical to keep it (implementation of schemes) simple. Quick disbursement of money on the basis of one or at-most two parameters and ensure annual signoff with no retrospective claims on industry on incentives disbursed," MAIT President Nitin Kunkolienker said. PRS MKJ

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IT sector gets relief with partial work resumption from April 20

IANS

Customs duty hike to make imported mobile phones, chargers slightly expensive

PTI

Inside India’s ₹50,000 crore scheme to woo electronics manufacturing including smartphones

Rounak Jain

Cabinet approves schemes to boost electronics mfg with Rs 48,000 cr incentives

PTI

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