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The Indian IT and electronics leaders on Sunday urged the Centre to lift certain tariffs and announce incentive schemes for sectors impacted by recession in the Union Budget for FY24.

Pankaj Mohindroo, Chairman of India Cellular and Electronics Association (ICEA), said that tariffs on inputs and components are an important barrier to increasing localisation.

"However, some of the smaller tariffs should be done away with to support local businesses and bring ease of doing business. ICEA recommends that the tariff of 2.75 per cent (including social welfare surcharge), among other smaller tariffs which have no beneficial impact and only create a burden for legitimate manufacturers, is removed," Mohindroo said in a statement.

Further, the duty on the mechanics is high but the vertical has not grown because unintended duties on inputs were imposed.

"All inputs duties on mechanics should be removed. Additionally, open cell is a hugely capital-intensive industry, and it is important to encourage it. However, the duties imposed on cells and chip on film (COF) have created an inverted duty structure for the manufacturing of open cells in India," Mohindroo added.

ICEA recommended reducing the inputs of the open cell at zero duty.

The association also suggested that the government should ease the BCD (basic customs duty) on high-end phones.

According to Mahesh Kumar Nutalapati, Vice President and Head, Finance and Accounts, Cyient Ltd, on the lines of production-linked incentive (PLI) scheme, "the government should consider service-linked incentive (SLI) schemes for industries in service sector by interlinking the incentive schemes for setting up offshore service units and employee generation opportunities."

Also, to tame the current recession, it is imperative for the government "to announce incentive schemes for sectors impacted by recession through achievement of metrics such as retaining headcount or additions to headcount," Nutalapati said.

Chocko Valliappa, Founder and CEO, Vee Technologies, said that the information technology industry can play a significantly bigger role in right-skilling engineering students by providing them meaningful internships to make them industry ready.

"The finance minister can help shape this talent pool for the job market by permitting the industry to invest 50 per cent of their CSR spend as stipend for internships to engineering students. This provision can turn out to be a win-win for both students and the tech companies," Valliappa added.

According to Varun Gupta, Founder and CEO of Boult Audio, the consumer electronics tech sector has significantly fostered the Indian economy even during the pandemic.

"To continue doing so, the government needs to rationalise taxes, promote R&D and provide incentives to ramp up manufacturing in line with the 'Make in India' campaign. Another crucial factor that the government must consider in the upcoming budget is the focus on cost management in the logistics industry," he noted.