EXIM Bank calls for low cost govt funding for hi-tech industries
Updated: Feb 25, 2014 03:18:47pm
New Delhi, Feb 25 (KNN) Export Import Bank of India (EXIM Bank) Report seeks government funding at low cost for high tech industries and products to make Indian goods competitive in the international market.
It has advocated the setting up of a credit facility by the government as per the Brazilian model to promote investments in hi-tech industries and special income tax privileges for manufacturers of high tech products.
“The Exim Bank study elucidates select measures that may be considered to enhance hi-tech exports from India. These, inter alia, include setting up a credit facility by the Government on the lines of the Brazilian BNDES model exclusively for investments in hi-tech industries and providing preferential corporate income tax treatment for units manufacturing hi-tech products and meeting certain pre-defined criteria as is the case in China for their High-New Technology Enterprises,” said an EXIM Bank study.
Titled ‘India’s Hi-Tech Exports: Potential Markets and Key Policy Interventions,’ the study was released by Commerce Secretary, Ministry of Commerce and Industry, Government of India, Rajeev Kher at the 4th CII Export Summit held in here on February-20.
The study has also examined successful development models of Chengdu in China and Colorado in USA, which despite being landlocked (away from ports by about 800 kms) have been able to become successful hi-tech manufacturing hubs.
“These have, over the years, increased their exports significantly, provided additional employment and generated higher tax revenues than neighbouring regions that have not adopted a hi-tech manufacturing strategy. These two examples indicate that hi-tech manufacturing is region-neutral and does not require large land area,” the study said.
The Government has put a renewed focus on manufacturing with the National Manufacturing Policy envisaging increasing the share of manufacturing to 25 per cent of GDP by 2022.
The study opines that giving thrust to value-added hi-tech exports needs to be an integral component of the strategy to achieve this target. Growth in hi-tech exports will boost the manufacturing sector, it pointed out.
Despite India’s early development strategy of creating a well-diversified industrial base focused on manufacturing, acceleration of manufacturing growth and the desired dynamism has thus far remained elusive. The share of India’s manufacturing sector stands at 13.5 per cent of GDP – a level which has remained stagnant over the past decade.
India’s share in global manufacturing today is only 1.8 per cent. It ranks 52nd in terms of manufacturing value added as a percentage of GDP, lower than even Bangladesh. This has had adverse impact on the country’s trade deficit with limited ability to export manufactured products, especially the value added high-tech products and excessive reliance on imports for meeting domestic demand. This is in stark contrast to the experience of other Asian nations, particularly China, where manufacturing constitutes 34 per cent of national GDP and accounts for 13.7 per cent of world manufacturing — up from 2.9 per cent in 1991.
Taking cognizance of the need to boost the manufacturing sector in India, the Export-Import Bank of India (Exim Bank) has done an analysis of the potential of Hi-Tech exports from India.
The study observes that hi-tech exports from India have been witnessing a significant CAGR of 26 per cent during the period 2007-2011, with exports having touched USD 20.9 billion as compared to USD 8.1 billion in 2007. Pharmaceuticals and electronic goods sectors dominate exports of high-tech products, with the share of electronics in hi-tech exports almost doubling during the 2007-2011 period.
The paradox of heightened demand (both in domestic and export markets) and lagging production, signifies avenues for domestic capacity expansion. This will not only lead to augmenting exports but also reduce the country’s dependence on high-tech imports, thereby rendering the country’s trade deficit more manageable, it said. (KNN/ES)
It has advocated the setting up of a credit facility by the government as per the Brazilian model to promote investments in hi-tech industries and special income tax privileges for manufacturers of high tech products.
“The Exim Bank study elucidates select measures that may be considered to enhance hi-tech exports from India. These, inter alia, include setting up a credit facility by the Government on the lines of the Brazilian BNDES model exclusively for investments in hi-tech industries and providing preferential corporate income tax treatment for units manufacturing hi-tech products and meeting certain pre-defined criteria as is the case in China for their High-New Technology Enterprises,” said an EXIM Bank study.
Titled ‘India’s Hi-Tech Exports: Potential Markets and Key Policy Interventions,’ the study was released by Commerce Secretary, Ministry of Commerce and Industry, Government of India, Rajeev Kher at the 4th CII Export Summit held in here on February-20.
The study has also examined successful development models of Chengdu in China and Colorado in USA, which despite being landlocked (away from ports by about 800 kms) have been able to become successful hi-tech manufacturing hubs.
“These have, over the years, increased their exports significantly, provided additional employment and generated higher tax revenues than neighbouring regions that have not adopted a hi-tech manufacturing strategy. These two examples indicate that hi-tech manufacturing is region-neutral and does not require large land area,” the study said.
The Government has put a renewed focus on manufacturing with the National Manufacturing Policy envisaging increasing the share of manufacturing to 25 per cent of GDP by 2022.
The study opines that giving thrust to value-added hi-tech exports needs to be an integral component of the strategy to achieve this target. Growth in hi-tech exports will boost the manufacturing sector, it pointed out.
Despite India’s early development strategy of creating a well-diversified industrial base focused on manufacturing, acceleration of manufacturing growth and the desired dynamism has thus far remained elusive. The share of India’s manufacturing sector stands at 13.5 per cent of GDP – a level which has remained stagnant over the past decade.
India’s share in global manufacturing today is only 1.8 per cent. It ranks 52nd in terms of manufacturing value added as a percentage of GDP, lower than even Bangladesh. This has had adverse impact on the country’s trade deficit with limited ability to export manufactured products, especially the value added high-tech products and excessive reliance on imports for meeting domestic demand. This is in stark contrast to the experience of other Asian nations, particularly China, where manufacturing constitutes 34 per cent of national GDP and accounts for 13.7 per cent of world manufacturing — up from 2.9 per cent in 1991.
Taking cognizance of the need to boost the manufacturing sector in India, the Export-Import Bank of India (Exim Bank) has done an analysis of the potential of Hi-Tech exports from India.
The study observes that hi-tech exports from India have been witnessing a significant CAGR of 26 per cent during the period 2007-2011, with exports having touched USD 20.9 billion as compared to USD 8.1 billion in 2007. Pharmaceuticals and electronic goods sectors dominate exports of high-tech products, with the share of electronics in hi-tech exports almost doubling during the 2007-2011 period.
The paradox of heightened demand (both in domestic and export markets) and lagging production, signifies avenues for domestic capacity expansion. This will not only lead to augmenting exports but also reduce the country’s dependence on high-tech imports, thereby rendering the country’s trade deficit more manageable, it said. (KNN/ES)
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