Statement from the India Electronics and Semiconductor Association (IESA)

Article source: IESA

BJP swept into power a few months ago in India. They have unveiled a new national budget that promises to create a framework to jump-start semiconductor and electronics development in India.

Dr. Kaustubh Nande, Country Marketing Head, ANSYS India commented:

“This budget definitely addresses some long pending reforms particularly on tax and duty structure on electronic imports. However, today’s budget also extends investment deductions to semi-conductor wafer fabrication manufacturing units. This will boost electronics manufacturing and attract a greater share of R&D investments in the country. India needs to build intellectual capital in the long term and this budget perhaps is a good start. A positive and much needed boost to the electronics manufacturing and R&D sector.”

NetApp Anil Valluri, President – NetApp Indian & SAARC commented:

“It is a well-rounded, directional budget which doesn’t overpromise but tackles important issues. The proposal of a Digital India programme which begins with 500 Crore INR to facilitate pan-India broadband connectivity and eGovernance, encourages indigenous hardware and software entrepreneurship and supports a National Rural Internet and Technology Mission is another big step in the right direction. The ambitious project will enable delivery of imperatives such as healthcare and education and financial inclusion to the grass roots, while creating new job opportunity and innovation in the software, hardware and services industries. The 100 Crore INR provided to enable virtual classrooms through the CLICK initiative is a welcome gesture and the conundrum of skill  demand and supply  has also been addressed with strong initiatives around the IITs and AIIMS. The strong focus on the SME and start up ecosystem is refreshing. But the highlight of this year’s budget is the focus on use of technology to empower infrastructural projects such Smart Cities. The relaxation of FDI eligibility thresholds aimed at the creation of Smart Cities provides the financial platform for technology-enabled urban regions. The introduction of e-Visas is another example of an entire industry benefiting from the adoption of technology. Delivering a stable and comprehensive direct and indirect tax regime will entail a modern technology infrastructure. The re-iteration of adhering to BASEL III norms by 2018 will mean upgradation of compliance and regulatory technology platforms.  The introduction of new industrial corridors, incentives for manufacturing units and measures to promote investments in the development of factories, airports, ports and roads will ensure that India attracts investors in all sectors.”

The following is the official statement from the India Electronics and Semiconductor Association (IESA) about the budget:

“India Electronics and Semiconductor Association (IESA) welcomes the budget aimed at boosting the Indian Electronics and semiconductor industry. The budget is growth supportive, anti-inflationary as well as committed to fiscal consolidation and   reviving growth in manufacturing. We believe the steps outlined for this sector by the Hon’ble Finance Minister and commitment from the industry will put India is on the journey of becoming the “Design Led Electronics Manufacturing hub” by attracting investments, promoting entrepreneurship and creation of jobs. The speed and focus of Honorable Union Minister for Communication & IT and DeitY in capturing industry needs from the electronics sector is very heartening and is a major milestone towards vision of making India an ESDM powerhouse.”

1. Manufacturing incentives at 15% for extended period of 3 years for manufacturing company that invests more than 25 crore plus would create massive push to the MSME’s in electronic sector. This will lead to the inclusive growth of the electronic manufacturing clusters coming up in the seven states, setting up of electronics units, investment/employment opportunities in the non-urban parts of India and help build component eco-system.
2. Corrections of Inverted duty structure on few ITA-1 products such as TV’s Computers, Smart cards etc. and  levy of 10% Basic Customs Duty on some of the Non–ITA 1 Telecom products aimed at making locally made products competitive, will boost manufacturing greatly.
3. 10000 Cr Start-up Fund with allow greater incentivization to R&D and Incubation centers that will spur the local IP development and product creation which constitutes almost 50% value addition for electronic products. Extended support of the government to the companies helping to create value by Innovation Led Designs in the ESDM ecosystem is commendable.
4. Support in the form of Investment Linked Deductions for Semiconductor wafer manufacturing units would help build the Semiconductor Fabs and ATMP units’ cohesive ecosystem potentially contributing to more than 40,000 crore FDI’s and job creations.
5. FDI in Defense sector is a huge step enabling local defense electronics manufacturing and competencies while attaining self-reliance as well as maintaining National Security. Funds of Rs. 5,000 crore allocated for defense outlay will give a boost to the modernization of the Aerospace & Defense sector.
6. We welcome Rs 500 crore funds for the Digital India program. This program’s focus on IT access to villages and broadband connectivity will provide the access to technology solutions, education and trainings through digital platforms thereby bringing the rural areas at par with urban ones.
7. Addressing Transfer Pricing issue will help global companies to invest more in India and also contribute to the innovations and competence development in the ESDM sector will contribute to ease of doing business, innovation & competence development in ESDM sector.
8. Additional announcements such as Smart cities, Power to each household through effective distribution, Industrial clusters will help  ESDM industry achieve great heights by developing technology solutions for these initiatives.
9. We would like to see provision of ‘Deemed Export Status’ for electronic products manufactured in India to be considered by Government in future and corrections of Inverted duty structure being applied on all ITA-1 products.

IESA extends its commitment to work together with the union government to realize the vision of Development and Growth of Electronic Systems Design & Manufacturing (ESDM) sector.

All these will create tremendous ‘Design Led Electronics Manufacturing’ opportunities in India with increased investment opportunities and reduced electronics import bill. It is appropriate to say now that, “ELECTRONICS KE LIYE ACHE DIN ANE WALE HAIN” (Good days are about to start for Electronics in India).

About the India Electronics and Semiconductor Association 
IESA is the premier trade body representing the Indian Electronic System Design and Manufacturing ESDM industry and has represented it since 2005. It has over 180 members -both domestic and multinational enterprises. IESA is committed towards building global awareness for the Indian ESDM industry and supporting its growth through focused initiatives in developing the ecosystem. This is through publishing credible data, networking events and alliances with other international associations. IESA works closely with the Government as a knowledge partner on the sector, both at the centre and at the state level. Visit www.iesaonline.org

Tags: Electronic, ESDM, IESA, India Electronics and Semiconductor Association, Indian Electronics and semiconductor, industrial cluster, Sanjay Gangal, smart cities, smart city

Category: IESA

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