MAIT Calls for Customs Duty Reduction and Tax Incentives in Union Budget
The Manufacturers' Association for Information Technology (MAIT) has submitted pre-Budget recommendations to the government. The industry body urges a reduction in basic customs duty on critical electronic components. It also seeks enhanced tax incentives in the upcoming Union Budget. These measures aim to strengthen domestic manufacturing and improve global competitiveness.
Proposed Duty Cuts on Key Components
MAIT specifically proposes cutting basic customs duty on several key sub-assemblies. These include camera modules, display assemblies, and connectors. The association recommends lowering the duty from 10 percent to 5 percent. This reduction would lower input costs for manufacturers. It would also enhance the competitiveness of Indian electronics products in the global market.
Addressing Global Uncertainties
MAIT highlights the current global economic landscape. The industry body states that the Budget assumes a role of paramount strategic importance. This is due to ongoing geopolitical tensions, supply chain disruptions, and growing trade uncertainties. MAIT points out that disruptions in global supply chains have exposed vulnerabilities. Over-reliance on imports makes the industry susceptible to external shocks. The weaponisation of trade policies further complicates the situation.
Push for Manufacturing, Jobs, and Exports
The association calls for strategic interventions in several areas. These include:
- Increased adoption of Information and Communication Technology (ICT)
- Better integration of Artificial Intelligence (AI)
- Improved market access for Indian products
- Enhanced credit guarantee coverage for micro and small enterprises, startups, and export-focused MSMEs
To bolster domestic manufacturing, MAIT stresses the need to rationalise import duties. This applies specifically to components that are not currently manufactured in India.
Support for Mobile Manufacturing and Other Sectors
MAIT recommends continuing incentives for domestic mobile manufacturing. The Production-Linked Incentive (PLI) scheme for mobiles is set to end on March 31, 2026. India has emerged as a leader in mobile manufacturing. The association believes the country needs to build on the capacity created. This will support both domestic consumption and exports.
Further recommendations from MAIT include:
- Zero duty on parts and inputs for inductor coils
- A reduction in import tariffs on audio components from 15 percent to 10 percent
- An extension of the "import of goods for repair and return" period from seven years to 20 years to align with global practices
Direct Tax Proposals
On direct taxes, MAIT proposes an increase in the lower salary cap for deductions. Under Section 80JJAA, the cap should rise from Rs 25,000 to Rs 50,000. This adjustment accounts for wage inflation. It also aims to promote formal job creation in the sector.
The industry body's comprehensive recommendations reflect a clear strategy. MAIT seeks to make Indian electronics manufacturing more resilient and competitive on the world stage through targeted fiscal policies in the upcoming Budget.
