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Retrospective changes

Changing policy midstream turns off investors

Topics
Core Sector  |  Phased Manufacturing Programme  |  Samsung

Business Standard Editorial Comment 

Government attempts to micro-manage the economy are always vulnerable to capture by special interests, and may well turn counter-productive. This is especially true when there is no consistency in policy across time — which is sadly not uncommon in India. Consider the efforts made of late to indigenise the production of electronic items that are commonly imported — particularly mobile phones. The (PMP) of the government wanted to force mobile phone companies to start local manufacturing of components any time in the coming financial year of 2019-20. However, this has now been changed by an order issued earlier this month, which said that mobile phone companies should comply by February of this year, or face an import duty of at least 10 per cent. Even companies that had sought to comply with the earlier PMP order, such as Samsung, are now reportedly thinking of scaling back manufacturing in India because of the change in policy.

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First Published: Tue, January 22 2019. 00:54 IST
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