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August 26, 1999
Hardware and software export industry warned
Rapidly changing global trends in consumption patterns, technology and new products may retard the growth of India's electronic hardware and software export industry and leave it far behind technologically, an apex council said today.
In a presentation made before the Union government's Expert Committee of Development Council for Electronics Industry, ESC has drawn attention of the government to the downward trend that has set in some areas like consumer electronics, telecom equipment and data processing systems.
A distinct declining trend in the country's hardware exports has been observed during the last two years with a sharp fall of 19 per cent estimated during 1998-99, compared to the previously year. In value terms the hardware sector recorded an export performance of Rs 24.75 billion during 1998-99 against Rs 30.4 billion in the previous year.
ESC Vice-Chairman P K Sandell said India's design and development capability and production standards should reach international standards to offset the impact of the World Trade Organisation's decision of zero or low import duty by 2004 on exports and domestic production.
Sandell laid special emphasis on research and development activities to give a push to the hardware and software industry.
"Government should consider a 200 per cent income tax rebate on research and development cost incurred on a product which is successfully exported," he said.
He also called for a five-year tax holiday for non-resident Indians and foreign investors setting up 100 per cent R&D projects for product development in the country.
Department of Electronics Secretary Ravindra Gupta chaired the meeting. Senior government officials from the Department of Telecommunication, Department of Science and Technology, Planning Commission, National Informatics Centre and representatives from the trade and industry attended the meeting.
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