USIBC Advocates for Media and Entertainment Industry's PLI in the Upcoming Budgets

On Sunday, a leading American trade organization focused on India suggested that the Indian government consider executing production-linked incentives for the media and entertainment sector in the forthcoming Budget. The organization also urged measures to ensure fair competition between Indian and foreign enterprises.

Ahead of Union Finance Minister Nirmala Sitharaman’s annual budget presentation on July 23, the US India Business Council (USIBC) recommended for liberalizing the satellite communications industry executing measures to protect fair competition between Indian and foreign financial services firms, as well as to ease effortless capital flow between the two countries.

In its memorandum to the Union Finance Ministry, USIBC suggested the dismissal of value restrictions on courier exports considering Rs 5 lakh to streamline processes and increase efficiency. The council also suggested removing restrictions on decomposable goods transported via courier to accelerate clearance, thereby supporting perishable trade dynamics. Additionally, USIBC suggested the establishment of a single window system for courier shipments to enhance operational efficiency and reduce bureaucratic threads. 

"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 proposed that ESOPs and similar employee benefit schemes, where settlements are made through the employer, be spared from the tax collected at source (TCS). These recommendations aim to establish policy clarity and ensure uniform adherence to rules and regulations across various authorities. 

Regarding the telecommunications sectors, USIBC recommended liberalizing the satellite communications industry and devising a comprehensive, long-term strategy to commercialize India’s Indian Satellite System (INSAT), thereby facilitating space platforms infrastructure development.  

"While benefiting all digital manufacturers, our semiconductor members have emphasized 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.

The adoption of advanced technologies like visual and special effects (VFX), 3D/4D formats, drone shooting, and animations could receive increased supports through these incentives,akin to those provided in the information technology (IT) and IT-enabled services (ITeS) sectors, thereby bolstering India’s appeal for international media production.

USIBC also recommended that the Indian government foster sustainable growth in the energy sector by upholding free-market principles, which will attract investments and improve energy security. To enhance downstream fuels, the suggestion includes establishing an independent entity to oversee pipeline infrastructure, ensuring fair access and transparent tariffs.