It’s time for the IT industry’s marketing partners to align themselves to the new government’s policies
For long, marketing strategist of the IT industries have depended upon the multinational products entering into the Indian market to build their business. However, it’s time for the IT industry’s marketing partners to promote Indian products and solutions in the global market. They have to understand that there has been a change in the perspective on the business policy and this government wants to promote exports rather than encourage an influx of multinational products in India. Hence, the IT marketing partners should align themselves to this changed course in government policy. In the following passages, we give some developments in government policy and also some views from some IT marketing leaders.
Union Minister of Commerce & Industry and Railways, Piyush Goyal, chaired a meeting to review and formulate an action plan for Government E-Marketplace (GeM) to achieve a target for Rs. lakh crore Gross Merchandise Volume (GMV) on GeM in FY 2019-20.
Minister of State for Commerce and Industry, Som Parkash also attended the meeting. Chairman, Railway Board and Secretaries of Departments of Promotion of Industry and Internal Trade (DPIIT), Commerce and Director General of Foreign Trade (DGFT) and Secretaries of Ministries of Petroleum and Natural Gas, Housing and Urban Affairs, New & Renewable Energy and Power also participated in the meeting to explore various possibilities of bringing on board more Government of India Ministries/ Departments, PSUs under Ministries and State Governments on the GeM platform.
Commerce & Industry Minister appreciated the transformation in public procurement driven through GeM platform. He directed the officers to maximise the use of GeM to ensure transparency and saving in procurements. He said that the procedure for using the GeM platform has to be made simpler, less time consuming and attractive so that more and more vendors, especially from the MSME sector, come on board. Ease of getting registered on the GeM platform has to be ensured so that public sector banks, PSUs, Ministries and Departments of the State Governments and local bodies at the district level are able to procure from GeM easily and smoothly.
The Commerce Ministry is holding a series of meetings with various industry associations on tariff elimination under the proposed 16-member Regional Comprehensive Economic Partnership pact, as it prepares for the crucial round of negotiations recently in China, followed by a meeting of trade ministers.
Commerce & Industry Minister Piyush Goyal interacted with representatives from various export promotion councils such as engineering, auto, chemical, pharmaceutical, leather, agriculture, marine & food processing, dairy, copper, zinc, aluminium, textiles and gems in separate meetings in Mumbai on Monday to discuss their specific concerns on the RCEP.
This will be followed by more meetings in New Delhi between industry representatives and senior government officials.
The Government of India has launched a scheme namely, Trade Infrastructure for Export Scheme (TIES) from FY 2017-18 with the objective to assist Central and State Government Agencies for creation of appropriate infrastructure for the growth of exports from the States. The Scheme provides financial assistance in the form of grant-in-aid to Central/State Government-owned agencies for setting up or for up-gradation of export infrastructure as per the guidelines of the Scheme. The scheme can be availed by the States through their Implementing Agencies, for infrastructure projects with overwhelming export linkages like the Border Haats, Land customs stations, quality testing and certification labs, cold chains, trade promotion centres, dry ports, export warehousing and packaging, SEZs and ports/airports cargo terminuses. The Scheme guidelines are available at http://commerce.gov.in.
Under the TIES Scheme, a total of 28 export infrastructure projects have been provided financial assistance during FY 2017-18, 2018-19 and 2019-20 (as on 1st July 2019).
The Government of India strives to ensure a continuous dialogue with the State Governments and Union Territories on measures for promoting exports and for providing an international trade enabling environment in the States and to create a framework for making the States active partners in boosting exports from India.
It is to be noted that, imports have been increased and IT products are now under 12% CVD with an additional 4% Spl CVD, with GST over and above this amount. This is in line with the government’s policy to encourage export of Make in India products. Hence, expanding beyond the known frontiers and taking the Indian software and hardware in the global market is what the government envisions and what the IT industry’s marketers should focus on.
Perspectives from the IT Industry
The IT industry leaders have expressed different viewpoints, some of which are in line with the govt policies and some are different.
“As far as the IT hardware industry is concerned, what we expect is the slab for Income Tax should be reduced to promote small industry investors to reinvest in the business. When the profit is reinvested as capital the income tax benefits on such capital should be reduced. That will increase investment in business and will create opportunities and cash rotation. The Government should also control refurbished material import to India. Today, refurbished material constitutes almost 40% of the total trade”, Mahesh Kurup, Founder, Ozone Computer Services, Coimbatore
“Software reseller community can only dream of a govt policy which is favourable to it considering the fact that there is still a confusing bureaucracy which considers software selling a service and not considering the fact that software unit is the quantity and based on the number of users. This confusion has carried forward under GST regime too which is going to create more issues with the software reseller going forward once the audits begin. We hope the government realises that software is the soul of the computer and it has to be made cheaper and help grow the digital economy. They have just realised it by RBI reducing NEFT/RTGS charges recently and ever since we started talking about Digital India the cost of banking transactions had only gone up which is shows that’s human labour is cheaper than digital labour. The Government also should listen from various sources and not just only one forum or association for representing the views”, Harinder Salwan, Founder, Tricom Multimedia
“IT will continue to drive the success of all types of business with innovations around AI, ML, social media, Cloud, IoT, Cybersecurity, Blockchain etc. The success of IT innovation will determine the overall success of other industries including the government’s digital drive. Hence, the IT industry, as the enabler for the success of all other government and private business, should be accorded special status. Policy and framework to promote homegrown IT innovations is the urgent need of the hour to promote growth and provide large scale employment opportunities. Local manufacturing needs special promotion to reduce dependence on imports of basic electronic goods such as mobile and other household items thereby promoting employment and reducing dollar outflow for low tech mass volume goods”, Sriram S, Co-Founder & Chief Strategy Officer, iValue InfoSolutions
Dr. Archana Verma | Editor – DQ Channels
With additional comments from B Swaminathan, a Contributing Columnist with DQ Channels