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Tuesday, September 28, 2021

Ravi Shankar Prasad: ‘With new, pro-investment tax regime, we’re going to make a big case for India’

Ravi Shankar Prasad said that his department is prioritising components manufacturing as well to ensure the entire value chain is present in India.

Written by Pranav Mukul , Anil Sasi | New Delhi |
Updated: October 7, 2019 6:58:21 am
Ravi Shankar Prasad, Finance Ministry, electronics manufacturing sector, India US trade, corporate tax, india news, indian express Union minister Ravi Shankar Prasad. (Express photo by Javed Raja)

With the Finance Ministry relaxing the corporate tax regime bringing it at par with some of the global destinations for electronics manufacturing, the Ministry of Electronics and Information Technology is planning to make India’s case overseas to attract global investor interest in production of electronic goods. Union Minister for Communications, IT and Law Ravi Shankar Prasad, in an interview with PRANAV MUKUL and ANIL SASI, said that his department is prioritising components manufacturing as well to ensure the entire value chain is present in India. He also spoke on issues including 5G trials, Huawei and stress in the telecom sector. Edited excerpts:

How is the Electronics Ministry trying to make the most of the corporate tax reduction?

The new tax regime which we have brought about is the biggest reform since the early 90s. Close to 15-17 per cent for a new company and 25 per cent plus for existing company. Minimum alternate tax has been reduced, CSR can be invested for R&D. India’s tax regime is now comparable to the best in the world as far as investment is concerned. So, we hope large investment will come in India and I’m in particular pushing the case of electronics manufacturing. As you all know, India has a very good track record as far as mobile manufacturing is concerned. Now, even PCBs are being made in India. We are hearing encouraging stories from Apple also, and for me, the happiest moment would be to see on my Apple phone “Designed by Apple in California, Assembled in China”, where China is replaced by India. Samsung has also withdrawn from China.

Are there any specifics that the Ministry is working out to attract further investment in electronics manufacturing?

There is immense potential and India has to offer a large market, good human resource, a very proactive leader globally and pro-investment policies. All the ecosystem is in place. Therefore, with new, very promising and pro-investment tax regime in place, we’re going to make a big case for India.

I have already instructed my department that components manufacturing should be given priority so that entire value chain is covered, including the possibility as to how some incentives can be accorded to the value chain. We are also looking to send our officers with some industrialists to showcase India in roadshows abroad. We are going to push electronics manufacturing in a big way.

But as far as mobile manufacturing is concerned, less than 20 per cent of the value chain is being sourced locally…

We will work out the details, but there should also be a window for global manufacturers. You must understand that our electronics manufacturing was $29 billion in 2014-15, and it grew to $70 billion in 2018-19. Most importantly, India’s share in global manufacturing grew from 1.3 per cent in 2012 to 3 per cent in 2018, which is a big jump.

There was an expectation of a trade deal between India and the US, but it doesn’t seem to have worked out…

Piyush Goyal, our Commerce Minister, is in discussion and it should work out. India-US relationship and President Donald Trump and Prime Minister Narendra Modi’s relationship is at a new high. I will not go into specifics but it will work out.

There was a specific demand from the US on reduction of import duty on some mobile phone categories, which we haven’t done. Was that one of the reasons the deal wasn’t finalised?

I will not comment on specifics. When something is part of negotiations, I will not comment unnecessarily.

One of the realisations that India had from the Huawei episode was that we needed more localisation as far as telecom equipment is concerned. What are your plans towards that?

I already instructed my department that India should become a big centre of telecom equipment manufacturing. Chinese companies are there but other companies are also there. I don’t want to see everything from a China focus. I have to make India the big centre because India is a huge market.

Is there any update on whether Huawei is being allowed for 5G trials?

Things are in progress, security concerns are being worked out, but I will not like to make any comment. It is a process and the consultations are on.

You had said while taking charge as Telecom Minister that India will conduct 5G trials within 100 days, but it hasn’t happened so far…

All the players are trying their best to do the trial. The whole point is that whenever I talk of 5G, it gets engrossed in Huawei. That’s not a fair way to look at it.

What are you doing to mitigate the stress in the telecom sector?

I have already conveyed it to the Finance Minister. We understand the telecom sector is important. We are in dialogue with them. But they also have to become professional.

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