As reported in a leading daily, lower corporate tax for greenfield units could give India an edge over Vietnam and Malaysia in attracting top dollars into local gear production.
September 24, 2019
According to the experts, the sharp cut in corporate tax and lower rate for new domestic units is expected to attract a whopping USD 50 billion of foreign investment into telecom gear manufacturing.
Sandeep Aggarwal, Managing Director of domestic optical fiber cable maker Paramount Communications, said “the big-bang tax reform is timely as many global telecom gear makers, who were lately relocating their factories from China to Vietnam, will find India equally attractive”. Foreign network vendors with existing manufacturing units in India, however, want similar tax breaks to galvanize them into boosting production capacities and capex spends, especially as they are already manufacturing 5G gear locally in the run-up to the next spectrum sale – likely by this year-end or early 2020 – that will mark debut of 5G airwaves.
NK Goyal, chairman emeritus, Telecom Equipment Manufacturers Association of India has mentioned that offering an attractive 17.01% tax rate for new domestic manufacturing units promises to put India on the telecom gear and electronics manufacturing world map, with a potential to attract at least USD 50 billion in greenfield investments from the biggest global tech companies.
“We would urge the government to incentivize existing manufacturing entities in India to further grow volumes and capacity,” said a Nokia India spokesperson. Ericsson India Managing Director Nitin Bansal said it was “a fillip” for domestic manufacturing.