According to a news report, a leading US trade association, the US-India Business Council (USIBC), has welcomed the Indian government's decision to review the preferential market access (PMA) policy for domestically manufactured electronic goods.
The USIBC, which comprises more than 350 of the top-tier US and Indian companies, said it has consistently argued for market-based incentives, not mandates, to encourage manufacturing in India.
Ron Somers, president, USIBC, has reportedly said that there are many US companies manufacturing in India, and they want to expand based on market-based principles, including adequate infrastructure, business-friendly policies, and access to a skilled workforce -all elements associated with a free-market economy.
USIBC had urged India to reconsider its policy to mandate the manufacturing of electronic goods in India, arguing that any reference to private sector mandates should be excised from any policy.
Regarding security, USIBC has suggested that high-level dialogues be convened to share best practices and protocols about how India and the United States can bolster security.
Is this needed??
Foreign players still lead Indian set-top box (STB) market
According to a quarterly report by 6Wresearch on the Indian STB market (Q1 2013), in spite of the relief given to local players by increasing the custom duty on imported STBs by 5 percent, domestic players are finding it difficult to manufacture STBs in India due to international players taking advantage of certain loopholes in the policies.
The report revealed that the total shipments for STB in India amounted to 5.3 million units in Q1 2013. Skyworth leads the India set-top box market, followed by Cisco, Coship, and others.
Imported STBs are purchased directly by multi-system operators (MSOs), who in turn sell to customers directly on a lease basis, thus avoiding VAT. However, local manufacturers are required to charge VAT on the sale of their STBs sold in India, which makes their products less competitive compared to the cheaper imports, thus hampering the scaling up of STB manufacturing in India.