Improve R&D for exports, ease of doing business, review tariffs on Chinese goods, industry leaders tell the FM

  • Industry leaders, finance ministry officials and leaders from trade and service organisations discussed ideas and suggestions to push the growth momentum and improve exports in a recovering global market

Manas Pimpalkhare, Rhik Kundu
First Published25 Jun 2024, 08:06 PM IST
Union finance minister Nirmala Sitharaman chaired the eighth pre-budget consultation in New Delhi on Tuesday.
Union finance minister Nirmala Sitharaman chaired the eighth pre-budget consultation in New Delhi on Tuesday.(PTI)

New Delhi: Leaders of trade and services businesses, in pre-budget consultations urged finance minister Nirmala Sitharaman on Tuesday to improve the ease of doing business for the service sector, make the transfer pricing regime more competitive, tighten tariffs placed on Chinese goods, and develop an Indian shipping line of global repute.

Top finance ministry officials and leaders from trade and service organizations discussed ideas to push the growth momentum and improve exports in a recovering global market, amid geopolitical turmoil.

‘Focus was to look at ease of doing business’

"Our key focus today was to look at the ease of doing business from the point of view of increasing service sector exports. Our focus was on making our transfer pricing regime more globally competitive," said Aashish Aggarwal, head of public policy at Nasscom.

"We have asked if it was possible to enhance the scope of the safe harbour regime, if we can look at safe harbour margin rates being reduced and make advance pricing agreements more efficient," he added.

Also Read: Modi 3.0 Budget 2024 Expectations: What are Finance Minister Nirmala Sitharaman's plans for taxpayers?

The need to protect domestic industry from dumping of Chinese products featured prominently in the discussions.

"We represented our industry pain points, which are imports from China and the threats we face from China," said Ajay Sardana, chairman - National Expert Committee on Chemical and Petrochemical, Indian Chamber of Commerce.

"China has created a lot of overcapacity. After the pandemic, with the demand coming down, they are dumping products in India at a cheaper price. We asked the finance minister to review the tariffs put on China," Sardana said.

Meanwhile, some industry leaders asked the government to step up investments in research and development to push exports.

"Exports require R&D and innovation. And therefore, the fiscal support to R&D should go up," said Ajay Sahai, Director General of the Federation of Indian Export Organisations.

Also Read: Budget 2024: Will Finance Minister Nirmala Sitharaman increase income tax exemption limit?

"Our other proposal is that we should develop an Indian shipping line of global repute," he added.

The finance minister has already met economists, representatives of industry, capital markets and financial sector, farmers' associations, trade union leaders and MSMEs for pre-budget consultations.

Senior finance ministry officials present at Tuesday's meetings included Ajay Seth, secretary of the Department of Economic Affairs,  and the government's chief economic advisor V. Anantha Nageswaran, finance secretary TV Somanathan.

Prominent leaders from trade and services organisations who attended the consultation on Tuesday included Vipul Shah (Gems & Jewellery Export Promotion Council), Ashwini Kumar (Federation of Indian Export Organisation), M Karthikeyan (Marine Products Export Development Authority), Debjani Ghosh (Nasscom), Sunil Yajaman (All India Fixed Internet Service Providers Association), among others.

Also Read: Budget 2024: A look at what corporate India expects from FM Nirmala Sitharaman — tax relief, higher capex & more

On Tuesday afternoon, the finance minister and top finance ministry officials also met leaders of employment and skilling organizations, who urged the government to give a policy push for up-skilling the new workforce and re-skilling the existing workforce, apart from putting more money in skilling and training.

"We proposed a tax suggestion that if companies are putting money into skilling and training, then they should get tax benefits. We also discussed how to get the industry to put more money into skilling and training," said Anshuman Magazine, Chairman & CEO (India, SEA, MEA) at CBRE.

"I have proposed a higher allocation to counter digital poverty. Children in government schools, colleges, and ITIs do not have enough computer time," said Gayathri Vasudevan, co-founder of LabourNet.

"We made two suggestions to the finance minister. The first was to provide language training to students along with technical skills so that they get global opportunities. We have asked if we can get some infrastructure for students to learn these languages while they are studying," added Sarvesh Agarwal, CEO of Internshala.

Prominent leaders from the employment and skilling industry present at the pre-budget consultation process included A.N. Sharma, director at the Insititute of Human Development (IHD), Manish Sabharwal, chairman of Team Lease Services Limited, Suchita Dutta (Indian Staffing Federation), Mohit Soni (Media and Entertainment Skill Council), among the others.

Transfer pricing refers to stock transfers between multinational companies or enterprises. 

The Indian transfer pricing law prescribes that income arising from international transactions or specified domestic transactions between associated enterprises should be computed on the basis of arm’s-length price. 

Any allowance for an expenditure, interest or allocation of any cost or expense arising from an international transaction or specified domestic transaction shall also be determined by using the same principle

The term safe harbour means through law, one is protected from a penalty when conditions are met. A major application of safe harbour is in taxation.

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First Published:25 Jun 2024, 08:06 PM IST
HomePoliticsImprove R&D for exports, ease of doing business, review tariffs on Chinese goods, industry leaders tell the FM

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