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Wednesday, March 03, 2021

Electronics: IT Min looks to restart production under ITA

As per the rules of the ITA, all the signatories have to “eliminate and bind customs duties at zero for all products specified”.

Written by Aashish Aryan | New Delhi |
January 29, 2021 3:05:02 am

The Ministry of Electronics and Information Technology (MeitY) is looking to restart manufacturing and export of electronic goods under the multination Information Technology Agreement (ITA), sources in know of the development told The Indian Express.

“We will conduct a study on the various aspects of it, such as whether the manufacturing under ITA is feasible for domestic companies and export sops that need to be given,” an official said.

Under the ITA, first signed in December 1996, signatories agreed to the manufacture and export of the then high-tech products such as computers, conductors, semi-conductors, testing equipment, and software. All the signatories are members of the World Trade Organization (WTO).

As per the rules of the ITA, all the signatories have to “eliminate and bind customs duties at zero for all products specified”. Though India joined the ITA in 1997, it could not scale up electronic manufacturing or export under the scheme due to the lack of a suitable ecosystem.

In a meeting of the WTO in 2012, India had highlighted the skew of the domestic ecosystem of electronics and related component manufacturing by arguing that each vertical was dominated by a handful of companies, most of which were foreign. This, India had then said at the WTO, was a huge barrier for entry of new companies and prevented large scale participation in the innovation process. Domestic companies had, as late as 2015, flagged the issue of viability and competition they faced from global electronic manufacturing giants.

Subsequently, however, with the introduction of electronics manufacturing and production-linked incentive schemes, the number of domestic as well as foreign companies making electronic products have increased significantly, the official said.

“The idea is to check for all products covered under ITA that can be manufactured at scale in India. Once we have checked for what can be manufactured and exported, the next step will be to prepare efficient strategies for curbing the imports of items under ITA by looking at global examples,” the official explained.

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