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'India’s WTO stand discourages R&D, manufacturing' |
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NEW DELHI: India's 1997 WTO deal that removed custom duty on imported electronic devices is discouraging the country's human resource, research and development activities as well as local manufacturing, but Make in India is a timely initiative which should have R&D as its backbone, a top telecom department official said.
"0% customs duty applicable through the WTO 1997 pact is a lost opportunity for R&D, indigenous manufacturing and human resource development," Rita Teaotia, special secretary at the telecom department, said at C-DoT's 'Make in India' conclave.
In 1997, the Information Technology (ITA) agreement was signed at the WTO where India committed itself to a zero-tariff regime for IT and electronic hardware, with total elimination of all customs duties by 2005.
Subsequently, while some local telecom manufacturing firms turned sick and closed down, foreign companies including those from Korea and China accessed the vast Indian market and prospered.
"Despite (telecom) industry growth since 2008, India's R&D and production were not a part of the growth story. Make in India is a timely initiative and we should look at it as a game plan as its first building block will be R&D," Teaotia added.
India's domestic consumption of electronics goods rely highly on imports, translating into a Rs 50,000-crore missed opportunity for local production. As things stand, this is estimated to grow eight-fold in the next five years but the Narendra Modi-led government aims to cut it down to zero by 2020.
With ambitious Digital India initiative with an initial outlay of Rs 1.13-lakh crore, the Centre aims to propel local manufacturing. Human resources in R&D and the desired skillset for local manufacturing however appear to be challenges.
"India is far behind in R&D strength. The country's human resource posse is one-fifth of the China's and one-20th of the US strength," Teaotia said, and added that the share of manufacturing in GDP has declined, which needs to be tackled.
The country has been on forefront in software development and other R&D activities in the space of technology and telecom products for the US and EU multinationals, and therefore have no IPR over products that makes the domestic scenario worrisome.
"With Make in India focus, the industry should look at producing cost-effective products with high quality and aim for long-term goals," the senior official added.
Source : economictimes.indiatimes.com
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