WTO REGIME

Importers of finished products feel there is nothing much to fear as it will only create a level-playing field.

With the WTO's duty-free regime all set to roll in to action in a few
months, manufacturers are banking on the Government to protect their interests.
Importers of finished products feel there is nothing much to fear as it will
only create a level-playing field.

Though unclear, reforms assured ...

Though the nitty-gritty of the WTO duty free structure is still not clear, I
am sure that the reforms started by Prime Minister, Manmohan Singh's during
1991, would be completed under his current tenure. This will only have a
positive impact on the entire economy. There might be some hiccups initially,
but these will be just teething problems.

Local manufacturing will be affected...

The tariff and taxations on some products in the IT industry might vary. If
that happens, the local manufacturing sector will definitely be affected. Local
manufacturers have every reason to worry since they would not continue to enjoy
the same benefits they have been enjoying until now. But they should take a
closer look at their core competencies and strategize how they make best of the
expected conditions.

Importing is viable...

With the advent of the WTO regime, some manufacturers are likely to shift
towards importing. However, they should ideally continue to be in the field of
manufacturing with their existing setups. Of late, the manufacturing cost in
China has increased manifold. Hence, locally manufactured products will have an
upper hand over Chinese products. Large export houses and manufacturers would be
benefited due to low labor cost, which would lead to increase in exports.

Level playing field...

Importers of finished goods will have some extra edge over local manufacturers
in terms of the formalities they will have to go through. When it comes to
prices, it will be more or less at par with the local goods. In fact, the WTO is
expected to create a level-playing field for both the parties on the price
front. Therefore there is no ground for the government to give local
manufacturers any price benefit across the board.

Healthy competition...

The WTO regime would give way for more number of players to enter the country.
This will create healthy competition. Companies will then have to leverage on
its strengths to survive in such a market. We would be more aggressive in our
company's policy of providing quality products as well as consistent supply
and good after-sales support.

Importers time to flourish...

Manufacturers have been for very long enjoying various benefits from the
Government. Now it is the turn of importers. However, the benefits would not be
something extraordinary in comparison.

Precipitation of confusion...

India will roll out the WTO duty-free regime in a couple of months. This will
definitely create confusion among manufacturers, especially about the
application of tariffs at various levels. The impact of this regime will be bad
for manufacturers, unless the Government steps in with some remedial measures to
sustain and grow manufacturing in this country.

Zero duty will make local goods costlier...

Local manufacturing plays a very important role in the development of any
nation. Zero duty on imported finished good will make locally manufactured goods
expensive. In such a scenario, local manufacturers would rather prefer importing
finished goods. It is therefore imperative that the government should offer
incentives to local manufacturers for promotion of IT hardware production.

Indian products, global quality...

The few IT manufacturing units in India are in a position to match the
global products in terms of quality and pricing. The Government should protect
these companies. This price differential that we get is by way of duties and the
competitive Labor cost. In the wake of the WTO implementation, this differential
will be narrowed down. Manufacturing may become a non-viable option if the
government does not take appropriate measures.

10% price advantage for local brands...

I think a price advantage of 10% should be given to local companies
manufacturing hardware products, above the price of the imported products. IT
hardware manufacturing should be exempted from various administrative laws such
as the Weights and Measure Act, labor laws and pollution control norms. Instead
the Government should bring in be flexible labor laws and relaxation of 30% from
payment of minimum wage rate. The state government also should be advised to
keep local taxes at minimum rate for IT hardware industry. Creating IT cluster.

Increased competition...

More brands will come to India and there will be increased competition. This
will force the local manufacturers to be more productive. And this will become
the focus for most manufacturers to survive. As a result, many are likely to
shift to production of high-end products where competition is lower and margins
are better. Other options would be to concentrate on innovative solutions like
design development or developing own products.

Uniform taxation required...

The entire value chain of IT products should to be taxed uniformly or the tariff
lowered. This will create a level playing field for manufacturing and trading.