Monday, September 21, 2009

R&D required in electronics technology

India which boasts of being an IT superpower, is heavily dependent on imports of electronic goods from countries like the U.S. and China to meet its domestic demand. In spite of having a tax exemption of 150 percent, the Indian industries spend very little on the research and development.

The joint study done by the Associated Chambers of Commerce and Industry of India (Assocham) and Ernst and Young points out that the Indian industry spends only $10 million on research and development.More than 70 percent of electronics appliances demand is met through imports, the study revealed.

More than 35 percent of electronics appliances imports in India are sourced from China. One wonders how India is going to compete with the so called 'Asian Tiger', increasingly depending on it in such critical areas.

The study, which is based on inputs from 89 companies, also stated that the Indian electronics and appliances market has less than two percent share in the global market, while share in production is less than one percent.

The Indian industry in general is seen as interested in making quick buck importing goods or technology even when such imports are of semi knocked down(SKD) form or completely knocked down(CKD) type.

The Government of India must provide more incentives, in tax and capital, to industries consistently investing in R&D

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