The government is planning to come up with an incentive package in the upcoming Budget to encourage manufacturing of electronic hardware including mobile phones and laptops as part of the 'Make in India' campaign.
Some announcements to this affect are likely to be made in the Budget by Finance Minister Arun Jaitley on February 28.
Pitching for a package of incentives, the Department of Electronics and IT (DeitY) has suggested that the Finance Minister should look at providing 10 year tax holiday for manufacturing of mobile handsets, tablets, laptops, desktops, telecom equipment, solar cells and medical electronics.
It suggested that a ten-year tax holiday should be made available for fresh investments in a block of 15 years in special economic zones, domestic tariff area, export oriented units and Electronic Hardware Technology Park.
Besides tax holiday, it has recommended removal of special additional duty from inputs and components, differential excise duty structure for laptops and desktops and 5 per cent interest subsidy scheme for the electronics industry.
The DeitY has observed that interest rate of around 14 per cent is too high as the competitors in other nations can access funds at 3-4 per cent.
These suggestions, sources said, are aimed at increasing India's capability in manufacturing of electronic hardware besides promoting 'Make in India' programme of the government which aims at making the country a hub for global manufacturing.
The department has also made a case for extending 5 per cent Focus Product Scheme to push exports of hardware industry. Currently, India imports electronic goods worth USD 35 billion every year.
The 'Make in India' campaign was launched last year by Prime Minister Narendra Modi to encourage domestic manufacturing and increase its share in the country's GDP.