India Needs More Funds to Boost Electronics Exports says a Report

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More funds are needed for electronics sector to help manufacturers in branding and distribution, which will eventually boost the exports, says a report.

According to the report by Electronics and Computer Software Export Promotion Council (ESC), electronics sector is at the back foot in the export arena because of lack of funds.

ESC suggested a series of steps for both government and private firms which also includes allocation of “special” funds for electronics sector to help manufacturers in branding and distribution.

The council also recommended to increase rate of incentives under MEIS (Merchandise Exports from India Scheme) for all products to all countries.

Under MEIS, the government provides duty benefits up to 7 per cent depending on product and country.

ECS said minimising human interface and promoting online procedures in export-related activities will help cut cost of doing business.

On computer software and ITeS sector, the report said the visa restrictions in countries like the US, Australia and Singapore adversely impact India.

To deal with such issues, ECS recommended that the companies set up on-site offices and hire local consultants and marketing professionals.

“India now needs to leverage intellectual property and aggressively pursue software products. This would require a significant change of strategy adopted by our IT companies and the government. There is a need to give fiscal impetus to software product development,” it said.

Computer software and ITeS export is estimated at USD 111 billion in 2016-17. This is expected to reach to USD 197 billion by 2022-23.

India’s export destinations include the US, UK, Singapore, Australia, Sweden, Germany, Switzerland and the Netherlands.

Further to boost exports of electronic goods, the report suggested that the government extend the fiscal incentives.

There is also a need to develop a conducive business environment to promote electronics goods manufacturing in the country, the report suggested.

The rising electronics imports is a major concern for India. The country has imported goods worth USD 42 billion in 2016-17 while exports stood at about USD 5 billion only.

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