Top US trade body seek PLI for M&E industry in upcoming Budget

New Delhi: A top India-centric American trade body on Sunday recommended that the Indian government should introduce production-linked incentives for the media and entertainment industry in the upcoming Budget, NewsDrum reported.

The trade body also called for steps to level the playing field between Indian and foreign companies.

Ahead of the annual Budget presentation by Union Finance Minister Nirmala Sitharaman on July 23, the US India Business Council (USIBC) pitched for liberalising the satellite communications industry and taking measures to create a level playing field for Indian and foreign financial services firms and reduce friction in the flow of capital between the two countries.

Proposing eliminating value restrictions on courier exports exceeding Rs 5 lakh to streamline processes and foster greater efficiency, USIBC, in its memorandum to the Union Finance Ministry, suggested removing restrictions on perishable goods shipped via courier to ensure swift clearance, supporting perishable trade dynamics and integrating a single window system for courier shipments to enhance operational ease and reduce bureaucratic hurdles.

"Firstly, we propose to issue a clarification regarding Input Tax Credits (ITC) under the Reverse Charge Mechanism (RCM) under the Goods and Services Tax (GST) on payment to expatriate employees. Secondly, we recommend that the concerned authority may issue appropriate clarification on eligibility of ITC on medical insurance to employees.

"Thirdly, we suggest issuing an appropriate interpretation clarifying taxability (GST) of the Employee Stock Purchase Plan (ESPP)/Employee Stock Option Plan (ESOP) provided by a company to its employees through its overseas holding company," it said.

USIBC also recommended providing an exemption via tax collected at source (TCS) for the ESOP and other similar employee benefit schemes where remittances are made through the employer. These measures are expected to foster policy certainty and ensure consistent practice of rules/laws by different authorities.

For the telecommunications sector, USIBC suggested liberalising the satellite communications industry and developing a long-term transition plan to commercialise India's Indian National Satellite System (INSAT) and enable space platforms and infrastructure.

"While benefiting all digital manufacturers, our semiconductor members have emphasised several ease-of-doing-business policies (EoDB) policies. USIBC recommends that the Indian government introduce production-linked incentives for the media and entertainment industry in the upcoming Budget," the trade body said.

Given the global demand for content and India's competitive production costs, these incentives would position India as a leading hub for content production exports.

The adoption of advanced technologies such as visual and special effects (VFX), 3D/4D formats, drone shooting, and animation could be further supported by these incentives, similar to those in the information technology (IT) and IT-enabled services (ITeS) industry, enhancing India's attractiveness for international media production.

USIBC also urged the Indian government to promote the sustainable growth of the energy sector by upholding free-market principles, which will attract investments and enhance energy security.

For downstream fuels, the development of an independent entity to manage pipeline infrastructure is suggested, ensuring non-discriminatory access and transparent tariffs.

A streamlined approval process for fuel retail outlets, inclusion of remote areas on highways and reconsideration of differential excise duties on unblended fuels are also advised.

Additionally, USIBC also suggested waivers of interstate transmission charges for offshore wind projects, sunset clauses for cross-subsidy surcharges, and non-tender-based offshore wind project awards.

On the financial services front, the trade body pitched for tax parity between foreign bank branches and India-domiciled banks, removing the limitations on dividends and the cap on related party payments applicable only to majority foreign-owned insurance intermediaries and ease the 'FDI safeguards' that dissuade foreign insurance companies from raising their stakes in their Indian insurance joint venture companies.

In addition, it called for facilitating the direct listing of shares of Indian companies on offshore stock exchanges, reinstituting the concessional 5 per cent withholding tax rate on external commercial borrowings and foreign portfolio investment in the rupee-denominated debt and streamlining the delisting process to facilitate take-private transactions could substantially enhance capital flows between India and the US.

USIBC recommended a balanced intellectual property rights (IPR) policy to facilitate technology transfer and bolster FDI, enhancing the effectiveness of schemes like the Production Linked Incentive (PLI) Scheme.

The trade body also called for customs duty exemptions on lifesaving medicines to ensure affordability and accessibility for patients. These measures aim to streamline regulatory frameworks, encourage investment, and support sustainable growth in India's life sciences sector.