As India emerges as a viable alternative for global majors to diversify their production base, industry players, without hoping for any big-bang reforms, are seeking policies that are business-friendly, boost domestic manufacturing ecosystem, and foster innovation in the Interim Budget 2024.
Furthermore, the manufacturing giants are also expecting the upcoming budget to propose a greater capex push, higher infrastructure allocation, port and digital infrastructure development to boost logistics efficiency and competitiveness.
The Confederation of Indian Industry (CII), a non-governmental trade association and advocacy group, has suggested the launch of the 'National Mission for Advanced Manufacturing' to enhance quality and productivity in manufacturing. It has also advocated for the establishment of an independent Ministry for Investment, as a single point of contact for facilitating private investment, both domestic and foreign, as well as for Indian investors to invest abroad.
“Expand PLI (Production Linked Incentive) to labour intensive sectors, such as apparel, toys, footwear for boosting employment generation, and to sectors with large imports but domestic capability, like capital goods, chemicals, to reduce import dependence. Extend the sunset date of concessional rate of 15 percent tax for eligible manufacturing units, under Section 115BAB to 31 March 2025,” stated CII in its recommendations.
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Aravind Melligeri, Chairman & CEO, Aequs, a diversified contract manufacturing company, is of the view that the Interim Budget 2024 presents an opportunity for the government to extend the PLI scheme to additional industries, especially labor-intensive manufacturing sectors, which would have a significantly larger multiplier effect on the Indian economy.
Federation of Indian Chambers of Commerce & Industry (FICCI) recommends extending the concessional tax regime for manufacturing operations for at least five years. The Finance Act 2021 had extended the sunset date under concessional tax regime of section 115BAB by only one year to March 31, 2024.
Ashok Rajpal, Managing Director of Ambrane India, highlighted the positive impact of Production-Linked Incentive (PLI) schemes and manufacturing incentives on the consumer electronics industry, reflecting a 53 percent YoY growth in the first half of calendar year 2023.
In his view, “To elevate the industry to international standards, additional support geared towards the export of 'Made in India' products is crucial. The sustained backing of the 'Make in India' initiative remains integral to our growth trajectory.”
Meanwhile, the Apparel Export Promotion Council (AEPC) has asked to provide tax concessions to apparel manufacturers adopting Environmental, Social, and Corporate Governance (ESG) and other international quality standards and compliances. The council also sought budgetary support for the branding and marketing of made-in-India products.
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