(a) the percentage of GDP achieved by the exports in information
technology and electronics goods sold last year;
(b) how does it compare with the other Asian countries;
(c) the reasons for such poor growth;
(d) the steps proposed to be taken to develop Indian IT hardware
industry;
(e) the date fixed for implementation of the Information Technology
Agreement(ITA) of world Trade organisation (WTO); and
(f) its likely impact on indigenous IT and telecom hardware industry?
MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI BALASAHEB VIKHE PATIL)
(a): The export of electronic hardware and software during the year
1999-2000 amounted to Rs.18700 crores, which is estimated to be around
one per cent of the GDP.
(b): According to a related indicator, reported in the World Development
Report 2000/01, India`s share of high technology exports as a per cent of
manufacturing exports in 1998 was 5 per cent, as compared to 10 per cent
for Indonesia, 15 per cent for China, 21 per cent for Hongkong, 27 per cent
for S.Korea, 31 per cent for Thailand, 54 per cent for Malaysia and 71 per
cent for Phillipines.
(c): While the Indian software industry has been doing consistently
well, the IT hardware industry is passing through a transition due to,
inter alia, lack of fresh investments, high tariff duty, poor
infrastructure, high cost of capital, restrictive labour laws
and complex procedures and regulations pertaining to exports and imports.
(d): Government recognises the importance of IT hardware industry and
its potential in contributing to the growth, employment and exports of
the country. Measures taken by the Government to promote electronic
hardware sector include permission for 100 per cent foreign investment
in units set up for exports, accelerated depreciation norms for computers
and peripherals, larger access to the Domestic Tariff Area and permission
for broad banding under EOU/EPZ/EHTP schemes, exemption from withholding
tax and higher weighted deduction for R&D activities. An Information
Technology Act 2000 has also been enacted. Further policy changes,
as and when necessary, would be effected to accelerate IT exports
on a sustainable basis.
(e): Of the 217 tariff lines bound by India under ITA, the phase out
schedule stipulates reduction of duty rates to zero on 95 tariff lines
by 2000, on 4 tariff lines by 2003, on 2 tariff lines by 2004 and on
remaining 116 tariff lines by 2005.
(f): Information Technology Agreement is expected to aid the
development of the domestic IT and Telecom industries as it is
expected to expand the world trade in IT products. India is
likely to benefit from the capital investments in R&D in this
growing field. ITA is also expected to improve the competitiveness
of other industries depending on IT.