India’s electronics industry will not take off until the sector is brought under a “convenient and cheap” tax regime, warned the Indian partner of New York-based Kodak, a conglomerate of technology and imaging firms.
Electronic products are subject to a goods and services tax (GST) of 28% in the country, the highest such levy in the electronics sector worldwide, and the industry will not grow unless the tax is reduced to 18% immediately, said Avneet Singh Marwah, CEO , Super Plastronics, the exclusive manufacturer of Kodak products in India.
“The pandemic brought immense instability to the entire electronics sector. A massive chip shortage only made the situation worse. Tax rationalization is crucial as the sector is currently going through extremely difficult times. A reasonable reduction in duties will also lift customer sentiment and invigorate the market,” he predicted.
Mr. Marwah said that in addition to high taxes, the industry is also suffering from rampant sub-billing by certain manufacturers. In particular, the import of scoreboards was severely underrepresented, causing the government to lose massive amounts of revenue, he stressed.
“It is already hurting the industry as it has a significant impact on direct and indirect taxes. We can see factual evidence for these false statements,” he added.
Regarding the chip shortage, he said: “We will see things change and settle down by the end of 2022. Next year we will also see chip price stability.”
According to Mr. Marwah, Kotak remained bullish on the Indian market, making a variety of products such as smart TVs, washing machines and other gadgets available through more than 80,000 PIN codes in the country.
“Kodak will invest £500 million this year to expand our manufacturing capacity in India. We are also targeting sales of half a million units to achieve sales of over £700m in 2022,” he added.