NEW DELHI: If India wants to attract foreign direct investment in computer manufacturing, it must cut tariff, says founder chairman of world's second largest PC maker Dell Inc, Michael Dell.
Dell, on his India visit, said Dell's 86 suppliers are planning to invest $19 billion in next two years, but not a single dollar is coming to India because of its high tariff structure.
He said one of its supplier plans to invest $5 billion in putting up a manufacturing plant. But, it has chosen Vietnam over India to invest.
At present, Dell sources around $ 19 billion worth of components from China and Taiwan but nothing is sourced from India.
Dell said India levies 20-25% tariff on PC production, which is very high vis-a-vis many other outries where tax rate is either very low or nil. Of a $500 PC, the duty element in India is around $100, which is very high. He felt this has affected computer penetration in the country.
However, because of sheer size of the Indian market, he said Dell is putting up an assembly unit in a Sriperumbudur SEZ near Chennai at an investment of $ 30 million to manufacture 400,000 units annually.
Dell said the first computer from the plant would roll out in July 2007. He said as and when demand for its personal computers will increase, the production will also ramp up.
At present, around 6.5 million PCs are sold in India. Dell met PM Manmohan Singh and other senior officials. He said the company's investment plan in India would depend on how the Indian government moves to lower taxes on computers.
Excise duty on PC is 12%. Besides, there is sales tax. Total tax burden is around 20%. But, there are regions like in Uttaranchal and Himachal pradesh, where excise duty is nil. Some companies have put up their plants in these areas to take the benefit of duty exemption.
But, Dell has put up its manufacturing plant in a SEZ in Chennai. In SEZ, no excise is levied on items that are exported.
But, the items are sold in the domestic market, the normal excise has to be paid. This has put Dell at a disadvantage when compared with other players.
source : TOI
Dell, on his India visit, said Dell's 86 suppliers are planning to invest $19 billion in next two years, but not a single dollar is coming to India because of its high tariff structure.
He said one of its supplier plans to invest $5 billion in putting up a manufacturing plant. But, it has chosen Vietnam over India to invest.
At present, Dell sources around $ 19 billion worth of components from China and Taiwan but nothing is sourced from India.
Dell said India levies 20-25% tariff on PC production, which is very high vis-a-vis many other outries where tax rate is either very low or nil. Of a $500 PC, the duty element in India is around $100, which is very high. He felt this has affected computer penetration in the country.
However, because of sheer size of the Indian market, he said Dell is putting up an assembly unit in a Sriperumbudur SEZ near Chennai at an investment of $ 30 million to manufacture 400,000 units annually.
Dell said the first computer from the plant would roll out in July 2007. He said as and when demand for its personal computers will increase, the production will also ramp up.
At present, around 6.5 million PCs are sold in India. Dell met PM Manmohan Singh and other senior officials. He said the company's investment plan in India would depend on how the Indian government moves to lower taxes on computers.
Excise duty on PC is 12%. Besides, there is sales tax. Total tax burden is around 20%. But, there are regions like in Uttaranchal and Himachal pradesh, where excise duty is nil. Some companies have put up their plants in these areas to take the benefit of duty exemption.
But, Dell has put up its manufacturing plant in a SEZ in Chennai. In SEZ, no excise is levied on items that are exported.
But, the items are sold in the domestic market, the normal excise has to be paid. This has put Dell at a disadvantage when compared with other players.
source : TOI