Intel's India plan hits a rough patch
Intel’s plans to invest in India seems to have gone awry with the government not accepting its demand for capital subsidy and cheaper electricity.
By TNN |
NEW DELHI: Intel’s plans to invest in India seems to have gone awry with the government not accepting its demand for capital subsidy and cheaper electricity. The IT major had also asked the government for sovereign guarantee for quality of electricity supply. “We are taking it (proposal) seriously but there is a limit to what we can do. It is difficult to meet their demands,” commerce & industry minister Kamal Nath, said on Thursday.
The government seems to have taken a tough stand despite the Investment Commission’s recommendation to extend sops to hi-tech electronic hardware majors like AMD, Intel and ST Microelectronics. In fact, the Commission had recommended fiscal concessions for Intel’s IT hardware products including chips and fabs. The Commission had done the hand holding for these companies to come and invest in India.
Earlier this month the finance minister P Chidambaram had said that the proposal for extending fiscal benefits to IT majors was already being considered by the department of telecom, which had agreed to act upon certain suggestions.
Intel, on the other hand, has been lobbying for fiscal concessions and cheaper infrastructure including land because of competitive rates being offered to the company in South East Asian countries like Vietnam. Electricity rates in India are almost four times those in the some of these countries, giving them a competitive edge for attracting investment. However, it must be noted that India offers a much bigger domestic market to companies like Intel for their hardware products.
The government seems to have taken a tough stand despite the Investment Commission’s recommendation to extend sops to hi-tech electronic hardware majors like AMD, Intel and ST Microelectronics. In fact, the Commission had recommended fiscal concessions for Intel’s IT hardware products including chips and fabs. The Commission had done the hand holding for these companies to come and invest in India.
Earlier this month the finance minister P Chidambaram had said that the proposal for extending fiscal benefits to IT majors was already being considered by the department of telecom, which had agreed to act upon certain suggestions.
Intel, on the other hand, has been lobbying for fiscal concessions and cheaper infrastructure including land because of competitive rates being offered to the company in South East Asian countries like Vietnam. Electricity rates in India are almost four times those in the some of these countries, giving them a competitive edge for attracting investment. However, it must be noted that India offers a much bigger domestic market to companies like Intel for their hardware products.
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