Piyush Goyal assures industry of finding solution for issues related to local taxes

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July 16, 2020 4:26 PM

On increasing local content requirement in product manufacturing, he said India is "not crazy about it", but the country will have to become self sufficient by strengthening domestic manufacturing.

On increasing local content requirement in product manufacturing, he said India is “not crazy about it”, but the country will have to become self sufficient by strengthening domestic manufacturing.

Commerce and Industry Minister Piyush Goyal on Thursday assured the industry about finding a solution for issues related to local taxes, such as electricity duty, as they make domestic manufacturers uncompetitive. The ministry is taking up the matter at all levels, he said at a CII webinar on renewable energy. Goyal made the comments while replying to a question about Indian industry becoming uncompetitive at times while competing with global players because of various non-credible taxes, like electricity duty and taxes on fuel, and how the government is looking to adjust these under ‘Aatmanirbhar Bharat’.

“We are conscious of this problem particularly because other countries may not be having a coal cess or mandi tax or electricity duty, and therefore our manufacturers do get uncompetitive because of it. “We have taken it up within the government and we are trying to assess what could be the mechanism…Our Indian manufacturers compete with let’s say FTA (free trade agreement) imports or other imports coming from other parts of the world, face this problem. I assure you that my ministry is taking it up at all levels and we will find a solution to this,” the minister said.

On increasing local content requirement in product manufacturing, he said India is “not crazy about it”, but the country will have to become self sufficient by strengthening domestic manufacturing. “Let’s say there is a particular component not available in India, it does not mean you import the whole equipment. So we will take up a practical and balanced view. We will have to strengthen domestic manufacturing in newer and newer items so that we can progressively move towards more domestic content, but we will have to do it sensibly without compromising quality and modern technology,” Goyal said.

He said all countries are looking at balancing trade, adding that it should be a two-way process and all countries should get fair opportunities and reciprocity in terms of access for goods and services. “Whichever country gives reciprocal access to their markets in a fair and balanced and transparent way, India wants to expand that engagement. So we are not against imports, what we are against is unfair treatment of India in certain parts of the world….We want the world to engage with us on fair terms,” he added.

He said ‘Aatmanirbhar Bharat’ campaign is not different from programmes like ‘SelectUSA’ or from the European Union bringing in high quality standards, which is a “non-tariff barrier” as it is a way of making sure that other countries can not produce and supply to them. Any foreign company which tries to suggest that India is being unfair will have to first look at themselves and see what is wrong that India is doing and “you will find nothing,” Goyal said.
Talking about renewable energy, he said its demand is increasing, and promoting domestic manufacturing in the sector and enhanced involvement of states will help.

He said Indian Railways is working to move towards 100 per cent clean power in the next 9-10 years, and “we have trials going on in Bina where we are trying to see if solar panels along the track can feed directly into our overhead transmission network of railways”. If battery storage would become cheaper, it will be able to build up battery banks, he said, adding that railways is also looking at a combination of different renewable energy sources.

On opportunities in Indian Railways, he said its entire renewable energy procurement will be 100 per cent based on ‘Made in India’ theme. “If a group of people or some credible enterprise decides to go in for a (semiconductor fabrication) plant, the government is willing to look at a completely attractive new dispensation to promote the plant in India,” he said.

On the role of states in promoting manufacturing, the minister said more than incentives, policy certainty is important. “I am now looking at talking to all states and having a competition with all the states that they give a commitment that irrespective of change of government or any other change, whatever they commit, they will fulfill for the rest of the tenure of the contract.

“We are looking at bringing guidelines to all state contracts also, something which was missing in many places. We are trying to make that compulsory and states will of course have to someday look at more efficient working so that losses come down and use more renewable energy. It is really high time to shut down plants which are over 25 years (old),” he said.

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