IT Taskforce

IT Action Plan (Part II - Hardware)


75. The Anti-dumping provisions in WTO agreement, as reflected in the Indian Laws applicable with effect from 1-1-1995 and subsequent amendments, will apply to all IT products except software.

76. The existing purchase preference criteria followed by the Government will be extended to all manufacture of IT products, including Supercomputers/Parallel Processing Systems, which are made in India. Government will give appropriate matching grants to IT Professional Associations and IT Promotion Councils for creating the climate and for sustaining moral pressure on manufacturers to maximise purchase of Intermediate Products and Primary products/components made in India.

77. Any S-BIT Unit which has made a capital investment in plant and machinery, during the preceding five years, of more than Rs. 200 crores or US $ 50 million (whichever is higher) exclusively for the manufacture of IT Products conforming to paras 1 and 3(c), will be eligible for a special price preference incentive of 4 percent.

78. Government purchase and disposal procedures for IT Products will be simplified in due recognition of the fast change in technology.

79. All Policy instruments above are equally applicable to Public Sector Units. For MOU signing PSUs, setting up of Joint Ventures for IT Products including Electronic Components, investments upto Rs. 10 crores can be cleared directly by the respective Board of Directors.

80. The Agency referred in Para-8, will bring out a six monthly list of items by 1 January and 1 July every year for inclusion under (a) List of Component inputs for zero percent Customs Duty under Notification No. 13/97 List A (or its successor notifications), (b) List of critical/sensitive import of dual-use items (for IT and non-IT purposes) requiring close monitoring by the Agency through post-audit of the LUT self-declaration that all the imports of dual use items by the Company are solely for the purpose of manufacture of IT components/IT products and that no such items are imported for trading purposes, (c) List of Capital Goods, Apparatus and Consumables for zero percent Customs Duty under Customs Notification No. 25/98 (or its successor notifications) and (d) Detailed lists of Primary Products and Priority Intermediate products with unambiguous and adequately detailed description of items generically listed in Annexures - IVA and IVB. The Lists will be issued by the Agency after due consultation with the concerned administrative Departments, the Ministry of Finance and the representatives of the industry. In case of disputed items, the Cabinet Secretary will be the sole arbitrator and his decision will be final for all purposes. The Initial List of the items above are given in Annexures-IIIA, IIIB, IVA and IVB.

81. An S-BIT Zone or S-BIT Habitat can itself be registered as a Cooperative or Municipality respectively, in which case the Capital investments for common cooperative or Municipal infrastructure will be covered under the same policies as for S-BIT Unit except that the capital equipment for urban utility infrastructure including all power, water supply and Telecom utilities will be added to the list of capital goods eligible for various import duty concessions under the S-BIT Units and subject to all other provisions thereof under the above policy instruments.

82. An 'IT Brand Equity Fund' will be created as a distinct part of the Brand Equity Fund administered by the Ministry of Commerce for the explicit purpose of promoting IT products made in India within the country and abroad. These funds will be utilised for creating and growing a congenial climate within the country and abroad for IT products made in India for creating new market avenues for them as well as for creating common facilities like Multimedia Mega Websites for promoting them over Internet and Extranets.

83. S-BIT Units will operate on the basis of maximal transparency of information with respect to IEM registration as per para 3(b) above, all the LUT Self-declarations, all the accounts going into the calculation of MVA as per para 6 above and details of all imports as per the fortnightly publication of Daily Trade Returns specified to 6 digit HSN; To enable this, a special Website will be created for the Units to automatically enter the above information in the periodicity and formats prescribed by the Government of India.

84. For granting the above policy instruments as an integrated package of incentives and procedural streamlining/simplifications and for sustaining without change (except for removal of anomalies and for fine-tuning, if any) for the period between 2 October 1998 and 2 October 2005, the IT industry, through their representative associations/Councils will ensure that the Indian IT Industry will create or cause to create export of IT Products and associated services worth US $ 5 billion per annum and cumulative CG investment in DTA and S-BIT Units of atleast Rs. 5000 crores by 2 October 2005; On the fulfillment of such target by the industry, the Government of India will extend the above policy package for a further period of 3 years upto 2 October 2008.

A review will be made in the year 2001 to consider extension of the target date for zero duty from 2003 to 2005 if the S-BIT scheme succeeds in achieving high growth of IT products made in India at internationally competitive prices.