India Eases Tax Rules to Attract Foreign Tech Experts, Boost Electronics Manufacturing

ENA Sectors 2025-02-10 16:53:41 New Delhi, Feb 10 (KNN) In a significant move to strengthen Indias electronics manufacturing sector, the government has introduced a simplified tax regime for foreign tech experts. Under this new framework, only 25 per cent of their remuneration will be taxable while they are working in India. This is expected to make India a more attractive destination for skilled engineers and specialists, especially those required for setting up and maintaining advanced manufacturing units. Industry executives have welcomed the change, noting that the previous lack of clarity on taxation discouraged many foreign experts from coming to India due to high tax rates and complex compliance requirements. Earlier, any foreign professional staying in India for over 90 days had to file tax returns, making short-term technical collaborations difficult. The new presumptive taxation regime, announced in Finance Minister Nirmala Sitharamans latest budget, removes these hurdles, allowing companies to bring in top talent from across the globe, including China. Alongside this tax reform, the government has also introduced a long-term safe harbor regime, ensuring predictability for global component and sub-assembly vendors. This move will allow them to store parts in India without concerns over fluctuating tax liabilities, further integrating India into global value chains (GVCs). To bolster domestic production, the government has scrapped the 2.5 per cent tariff on key smartphone components such as printed circuit board assemblies (PCBA), camera modules, and fingerprint scanners. Additionally, capital goods for lithium-ion battery manufacturing can now be imported tax-free, fostering growth in another crucial sector. The India Cellular and Electronics Association (ICEA) has urged swift implementation of these reforms. ICEA chairman Pankaj Mohindroo called it a welcome move the first of many needed to enhance Indias global competitiveness. With the electronics industry already witnessing rapid growth—reaching USD 118 billion in revenue in fiscal 2024—these changes are expected to further strengthen Indias position as a global manufacturing hub. (KNN Bureau) 41011 https://knnindia.co.in/news/newsdetails/sectors/india-eases-tax-rules-to-attract-foreign-tech-experts-boost-electronics-manufacturing 2025-02-10 16:53:41 knnindia.co.in India Eases Tax Rules to Attract Foreign Tech Experts, Boost Electronics Manufacturing