Xiaomi seeks incentives to boost exports

Sri City: Chinese tech giant Xiaomi on Monday said the Indian government needs to roll out more incentives to boost exports and bring greater clarity around RoDTEP rules, which are proposed to replace the export incentive scheme.

Xiaomi, which has partnered Foxconn to manufacture smartphones in India at two facilities in Sriperumbudur (Tamil Nadu) and Sri City (Andhra Pradesh), has also started exporting small volumes of devices to Nepal and Bangladesh.

"If we are able to make in India at costs which can match or are better than our existing total cost structure, we will but for that a whole lot of pieces need to fall into place.

We tried a proof of concept, the volumes are low as of now. For the long term, it's important for India to transition from a perspective of import-substitution to export-orientation," said Xiaomi India COO Muralikrishnan B.

He added that there are certain 'structural disabilities' that act as bottlenecks to these plans. He explained that one of these is the recent announcement around RoDTEP that

is proposed to replace MEIS next year.

Remission of Duties or Taxes on Export Product (RoDTEP) is a new scheme that is proposed to replace Merchandise Export Incentive Scheme (MEIS) from January 1, 2020.

"It is unfortunate that MEIS was WTO non-compliant...we have RoDTEP but we are waiting for further clarity and how much that could address the structural disabilities. There are inconsistencies vis-a-vis market reality when it comes to duty drawback," he said.

Muralikrishnan pointed out that if the Indian government can also get neighbouring countries to accept BIS standards, it would help push exports from India as there will be lesser compliance requirements.

If the government sets up labs in India that provide CE certification, it will also help export devices to market like the European Union, he added.

The state governments also have an important role to play as they need to provide plug and play infrastructure and conducive environment for setting up manufacturing parks for domestic requirements as well as exports, he noted.