India Pumps Up IT Manufacturing

"With the spread of information technology and IT-enabled services, the time is ripe to make India a preferred destination for the manufacture of semiconductors and other high-technology IT products," said India's finance minister in his yearly budget announced on February 28.

In a report on the budget, reported by Asian Times online on March 8, the minister announced a re-imposition of a 12% local levy (removed last year) on fully built computers. This gives tax credits to local hardware makers, thus allowing them to lower prices and compete more effectively against imports.

Indrajit Basu, author of the article, reports that the budget also removed import duties and local duties on input components. Commenting on these developments the Manufacturing Association of Information Technology (MAIT) said the latter step will make "locally made hardware more competitive and also encourage manufacturing of other high-end products."

Vinnie Mehta, executive director of MAIT added, "Even until a few years back, replete with infrastructure deficiencies like inadequate water [and power supplies], and poor roads, Indian could have hardly hoped [to become] a destination for high-tech manufacturing. But now as India witnesses an explosive consumption of electronic goods and equipment, this market has become too big to ignore."

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