Indian industry, including exporters, has called on the government to introduce tax incentives for research and allocate more funds for marketing activities in the upcoming budget. These measures aim to stimulate manufacturing and boost the country’s outbound shipments. Additionally, industry leaders have suggested the development of a global shipping line in collaboration with the private sector to reduce reliance on foreign shipping lines and support the growth of Micro, Small, and Medium Enterprises (MSMEs).
According to the Federation of Indian Export Organisations (FIEO), India’s outward remittance on transport services is on the rise due to increasing exports. In 2021 alone, over $80 billion was remitted as transport service charges. The FIEO predicts that this figure may reach $200 billion by 2030 as the country strives to achieve the goal of $1 trillion.
To encourage research and development (R&D) within the country, the FIEO has proposed increasing the weighted tax deduction to 200%. India’s current spending on R&D is less than 1% of GDP, significantly lower than other major nations like China, the US, Korea, and Israel.
Aggressive export marketing is also deemed vital to showcase Indian products and services to global customers. To achieve this, more funds are required under the market access initiative (MAI) scheme. The FIEO suggests the creation of a corpus for the scheme, starting with a pilot implementation in 50 districts with a corpus of ₹5,000 crore.
In addition to the FIEO’s requests, the sustainability and climate solutions industry is seeking crucial government support. World of Circular Economy (WOCE), a startup firm, emphasises the need for funds and incentives to address the challenges faced by companies in the sustainability sector, particularly small and medium-sized enterprises (SMEs). The WOCE founder and director, Anup Garg, recommends input tax credit for using green fuel in manufacturing processes, subsidised loans for investment in green technologies, and incentivising carbon-intensive factories for traceability initiatives in the raw material supply chain.
Furthermore, Garg suggests allocating funds to R&D in greener technologies and providing direct tax incentives for companies championing the use of decarbonisation tools and digital technologies to ensure reliable carbon data.
As the budget announcement approaches, industry leaders are optimistic that the government will take these suggestions into consideration, fostering growth and sustainability across various sectors of the Indian economy.
