With the Interim Budget coming up on February 1, the premier industry body for the development of a vibrant Indian Electronics System Design and Manufacturing (ESDM) ecosystem has suggested that the government abolish the Angel Tax for ESDM start ups and enable R&D through provisioning separate budget to fund projects of national interest in the Electronics & Semiconductor domain.
Start ups in Electronics and Semiconductor space primarily depend on Angel and self funding as very few Venture Capitals in India are investing is ESDM companies. Angel tax and the current policy of getting the start up valuation done by a merchant banker is hitting the ESDM start ups very hard.
Electronics and Semiconductor Association (IESA), is the premier industry body committed to the development of a vibrant Indian Electronics System Design and Manufacturing (ESDM) ecosystem and evangelising the dream of establishing “Brand India” that is recognised worldwide as a go-to destination for electronic products.
IESA president Rajesh Ram Mishra has appealed that the government should address specific issues that will help promote a thriving ESDM ecosystem across all segments in the country.
‘IESA believes there is a big opportunity of design led manufacturing to make India a global hub in intelligent electronics. We would like to appeal to the government to address specific issues that will help promote a thriving ESDM ecosystem across all segments in the country,’ he said.
The government should address industry concerns on disincentive for domestic manufacturing and products designed in India due to differential duty structure in multiple segments, he said.
Unlike software products, R&D for electronic products and semiconductors require higher investments. As rightly captured in the draft NEP, R&D for electronic products may need roughly USD 10-15 Million and R&D for Semiconductors (chips, ICs) requires USD 40-50 Million per product.(UNI)