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India: Mobile makers seek tax holiday

November 13, 2018

The prosperity of a nation is dependent upon the development of a nation at grassroot level. Reinforcement of the stability of the economic structure of the country is based on the factors including easy recourse to raw materials, better opportunities, investment friendly policies. The Government has devised numerous strategies to increase the production capacity of the country in terms of gross domestic product. Consistent efforts are evident with the fact that the country’s position has improved on the global ‘Ease to do business’ index. Policies in the form of “Startup India”, “Standup India” and “Skill India” have focussed on supporting the progress of the commercial sector of India. The beneficial schemes support economic growth in the form of elevation of output generation levels and employment opportunities.

The Policy matter…

With a view to improve the performance of India, at an international level, the Government introduced the Foreign Trade Policy (2015-2020) which aims to help diversification of India’s export by aiding various sectors of the economy to gain global competitiveness with a view to foster exports.

Attributable to multiple factors such as accessibility to resources, availability of labour, simplified regulatory compliances and procedural requirements have led to the transformation of the country into an entrepreneurial hub.

Mobile makers seeking tax relief

The blessing of innovation has facilitated the communication amongst people separated over large distances by the introduction of telephones. Form the basic Alexander Graham Bell version of the device, advancement in technology has added the essence of digitalization giving birth to the modern day mobile phone devices making life incomplete without their possession.

In order to boost the production and exports thereof in terms of electronic equipment such as mobile phones, the headset manufacturers have proposed a 10-year tax holiday on export of mobile phones giving India a competitive edge.
[1]

In the present scenario, India does not offer the required scale to attract high-end component makers of key products such as printed circuit boards and LCD screens to set up shop in the country. This problem is believed to be solved by targeting the export market in order to allow phased manufacturing programme to succeed.

While the electronics including mobile devices contribute majorly in the imports being made, provisions of tax-relief will not only increase the domestic produce but would also encourage the key players in the industry such as Apple and Samsung to base their manufacturing units in India.

With the experience from the past, it has been observed that whenever tax reliefs or tax holidays are given by the Government, production is increased by leaps and bounds. The projects are bound to succeed with such visionary steps.

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[1] https://economictimes.indiatimes.com/tech/hardware/handset-makers-want-10-year-tax-holiday-for-mobile-phone-exports/articleshow/66047952.cms

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