The Internet and Mobile Association of India [IAMAI] has said that WTO deciding against India’s export subsidy schemes and recommending the removal of the Merchandise Export Incentive Scheme (MEIS) and other such schemes will cripple the government’s plan (NPE 2019) to boost mobile handsets exports to USD 110 billion.
The Indian government has already made an announcement to the effect that it will file an appeal against the order in WTO and at the same time, introduce a WTO compliant export incentive scheme.
IAMAI has said that MEIS is not a standalone solution to help India in boosting an export-oriented manufacturing eco-system. India’s mobile handset exports were only USD 1.61 billion in 2018-19 against a target of USD 8 billion despite the export incentive scheme being in place. In order to attract new investments as well as more investments from the incumbent manufacturers, India will need nuanced policies.
IAMAI suggests that along with the fiscal incentives, there is a need to announce long term policies for the sector, create a globally competitive infrastructure and also review its import tariff policy based on the current state of component manufacturing in India.
Clarifying sector specific legislative issues and easing the regulatory framework to facilitate trade are equally important for creating a competent export oriented manufacturing ecosystem.
Although the association welcomed the decision of challenging the WTO order but at the same time it cautioned that merely bringing in MEIS or the equivalent export incentive scheme cannot put India on the mobile handset manufacturing and exporting map.