Date:04/11/2006 URL: http://www.thehindu.com/2006/11/04/stories/2006110406881600.htm

Business

Fiscal sops likely for electronics, IT hardware

Special Correspondent

Incentives can help cut end-prices of products

NEW DELHI: The Union Government is considering a bigger package of fiscal and other incentives for the electronics and IT hardware manufacturing sector with the aim of making the industry globally competitive as well as to attract more foreign direct investment. This was disclosed here on Friday by Commerce and Industry Minister Kamal Nath while addressing the annual function of the Consumer Electronics and TV Manufacturers Association (CETMA).

He said the electronics hardware manufacturing was a thrust area and the bigger package of incentives would help in reducing the prices of end products and enable a higher volume to take advantage of the economies of scale. He also stressed that it would raise demand and compensate for disabilities until basic infrastructure constraints were removed. .

The Minister said that in view of the special characteristics of the electronics and IT hardware sector as well as the challenge posed by the World Trade Organization stipulation for elimination of duties, the sector needed a special sectoral treatment rather than being governed by a general policy framework.

As a result of the efforts taken by the department, he said India had become a major destination for foreign investments in the information communication technology sector.