Budget 2023: Industry Seeks Tax Incentives, Funding Boost

New Delhi, Jan 25 (PTI) Indian industry, including exporters on Thursday, asked the government to provide tax incentives for research and more funds for marketing activities in the Budget to boost manufacturing and the country's outbound shipments.

They also urged the government to consider developing a global shipping line in partnership with the private sector.

India's outward remittance on transport services is increasing with rising exports.

"We remitted over USD 80 billion as transport service charge in 2021. As the country moves towards the goal of USD 1 trillion, this will touch USD 200 billion by 2030," Federation of Indian Export Organisations (FIEO) said, adding that the private sector may be engaged to develop the shipping lines.

This will also reduce arm-twisting by foreign shipping lines, particularly of our MSMEs, the organisation said.

For promoting Research and Development (R&D) in the country, weighted tax deduction can be increased to 200 per cent, it said.

"Unfortunately, India's spending on R&D (less than 1 per cent of GDP) is well below that in major nations such as China (2.43 per cent of GDP), US (3.46 per cent), Korea (4.93 per cent) and Israel (5.56 per cent)," Israr Ahmed President (Officiate) and Vice President FIEO said.

He said aggressive export marketing is required to showcase Indian products and services to the global customers, and for that more funds are required under the Market Access Initiative (MAI) scheme.

"For aggressive marketing, there is a need for the creation of a corpus... for the scheme," Ahmed said, adding that the government can consider announcing a scheme on a pilot basis in 50 districts with a corpus of Rs 5,000 crore.

Further, startup firm World of Circular Economy (WOCE) said the sustainability and climate solutions industry is urging the government for crucial support.

There is a need of funds and incentives for the industry.

"Companies in the sustainability sector, especially SMEs, are facing multiple challenges, including immediate financial burdens and securing necessary resources. Urgent government intervention is needed to overcome these challenges and facilitate the seamless integration of sustainable practices," WOCE Founder and Director Anup Garg said.

Garg also urged the government to consider providing input tax credit for using green fuel in manufacturing processes; and subsidised loans for investment in green technologies.

Besides, he asked to incentivise carbon-intensive factories for traceability initiatives in the raw material supply chain; allocation of funds for R&D in greener technologies; and direct tax incentives for companies promoting the use of decarbonisation tools and digital technologies for reliable carbon data.