Make tribunals efficient to free up disputed funds: Industry body

India should set up a centralised oversight mechanism to improve the functioning of quasi-judicial tribunals and unlock huge funds tied up in unresolved disputes, the Confederation of Indian Industry said.
CII said in a statement on Sunday that the efficiency of tribunals adjudicating on important areas such as labour, environment, and taxation is critical for improving the overall ease of doing business.
As of the end of December 2024, ₹ 6.7 trillion was pending resolution at the Income Tax Appellate Tribunal (ITAT) alone, accounting for nearly 57% of all the disputed direct tax amount in the country, the industry body said, pitching for a centralised oversight mechanism for tribunals.
Such a mechanism would ensure uniformity, policy coherence, and improvement in tribunals' overall performance, the industry body said.
CII suggested that to put this in place, suitable amendments may be introduced in the Tribunals Reforms Act, 2021, defining its mandate, structure, scope, and responsibilities. This central body could undertake functions like performance monitoring, data tracking, coordination with the search-cum-selection committees, capacity building, and independent grievance redressal.
The industry body also said administrative control of tribunals is fragmented across various ministries and departments, leading to a lack of standardisation and functional inconsistencies.
A key concern for tribunals is the absence of real-time performance statistics, which limits the scope for undertaking evidence-based reforms. In contrast, such information is readily available for the entire court system of the country on the 'National Judicial Data Grid', maintained by the e-committee of the Supreme Court, CII said.
Tribunals are quasi-judicial bodies designed to adjudicate disputes in specific disciplines, such as taxation, company law, environmental regulation, and public service matters. Today, over 16 central tribunals operate under different ministries across key sectors.
While the government has sought to address challenges through the Tribunal Reforms Act, 2021, constraints such as persistent vacancies, delayed appointments, inadequate infrastructure, lack of performance monitoring, and ineffective grievance redressal mechanisms continue to undermine tribunals' effectiveness and efficiency, CII said.
Setting up a centralised oversight institution for tribunals would be a transformative step towards making India's justice delivery system more responsive, efficient, and future-ready, directly contributing to boosting regulatory credibility, improving ease of doing business and enhancing investors' confidence, CII stated.

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Mint

2 hours ago

• Mint

After assembling 99% of its phones, India faces a harder manufacturing test

New Delhi: Over the past decade, India's electronics manufacturing sector has been defined by one thing: the mobile phone. From 2014 to 2024, the country went from assembling less than 30% of the phones it consumed to 99%, thanks largely to the ₹1.9 trillion Production Linked Incentive (PLI) scheme. According to the ministry of electronics and information technology (MeitY), the value of India's electronics production rose nearly fivefold to ₹9.5 trillion in 2023-24, from ₹1.9 trillion in 2014-15. Yet, for all the triumph in scale, for India to emerge as a global manufacturing powerhouse, it has to go beyond smartphones and also break free from its role as an assembly shop. To make mobile phones, electronic manufacturing services (EMS—or contract manufacturers) companies depend on imports of key components, including cameras, displays, high-end battery packs, semiconductors, and printed circuit boards (PCBs). Even other electronic products—smart TVs, CCTV cameras, computers, wearables, and hearables—are assembled from imported components. If product assembly is about managing global supply chains and focuses on integration and system level performance, 'manufacturing of components involves deeper scientific and engineering complexity," says Vinod Sharma, chairman of the Confederation of Indian Industry (CII)'s National Committee on Electronics Manufacturing. PLI boost Components are the DNA of electronics. However, the components that go into electronic goods in India are still largely sourced from China, Korea, and Taiwan. 'Even now, 85–90% of the electronics component value is imported," says a MeitY report. In 2023, only $15 billion of India's $101 billion electronics output came from components, the report noted. 'Without component manufacturing, there is no ecosystem. You can't make a product unless you can source the heart of it locally. Otherwise, you're just screwing parts together," says Sanjiv Narayan, co-founder of Syrma SGS Technology, a three-decade-old electronics manufacturing company. The ₹3,700 crore company, which exports 30% of its production, has 13 factories manufacturing electronics, automotive, telecom, and industrial electronics products, among others. In an effort to incentivize component manufacturers and boost localization, the government launched a ₹22,919-crore Electronics Component Manufacturing Scheme (ECMS) in April. The last date for companies to apply for benefits under the scheme is 31 July. ECMS will run for six years, from 2025-26 to 2031-32. It offers incentives for the manufacture of various components, including camera modules, displays, and multi-layer PCBs. As CII's Sharma put it, 'Components of components need to be there. The components policy is trying to address this issue by giving incentives for creation of the local ecosystem." Indeed, in a release announcing the launch, MeitY stated: 'The scheme aims to develop a robust component ecosystem by attracting large investments (global/domestic) in the electronics component manufacturing ecosystem, increasing domestic value addition by developing capacity and capabilities, and integrating Indian companies with global value chains." ECMS envisages attracting investments to the tune of ₹59,350 crore, generating production worth ₹4.5 trillion and creating additional direct employment for 91,600, as well as many indirect jobs. It has already received 70 applications— 80% from small and mid-sized players. According to reports, large companies such as Tata Electronics, Foxconn and Dixon Technologies are among the applicants. Queries sent to MeitY are yet to elicit a response. The scheme could provide the missing piece for expansion beyond smartphones. If implemented effectively, it will help build domestic supply chains for crucial components—an essential step in reducing dependence on imports. While the new PLI scheme has a long list of components, India does not have expertise in all of these. Initially, it will go with electro-mechanical components such as relays, switches, fuses and capacitors, for which manufacturing is already happening locally. These are the low-hanging fruit that Indian manufacturers can go after immediately. There is local expertise in parts such as camera modules and the industry will have to bank on collaborations, or global manufacturers might set up base here to make these. Interestingly, back in the 1980s India had a thriving components hub, with up to 80% of the black & white TVs sold in the country manufactured with locally sourced components. But later, with technology shifts, limited scale and zero import duty on components, the ecosystem for electronic parts died an early death. Engineering complexity For all the ambition, manufacturing components is a complex business, vastly different from assembling electronic products such as smartphones. The latter is akin to putting together 400-500 components, including cameras, sensors, a battery, memory, integrated circuits, and other parts to make a fully functional device. While all of that may seem complicated, assembling a smartphone is like a walk in the park compared to making components. To put that in context, each of the 500 or so components in a smartphone has multiple components within them. 'A manufacturer of components is dealing with far more complexity than someone who is assembling those components," says Narayan. 'It is foundational engineering. Making components requires advanced materials science capabilities, highly specialized machinery, precision control at nanometer scales." For instance, making advanced batteries needs understanding of complex battery chemistry, rare materials and very precise manufacturing. 'Right now, India is building the research, deep tech ecosystem and infrastructure needed for this level of manufacturing. As these areas grow, we have a strong opportunity to reduce our reliance on other countries," says Varun Gupta, co-founder of Boult. The company designs, develops and manufactures wireless earbuds, headphones, smartwatches and speakers, among other electronic gear. Each component is a mini-system in itself. Take for instance, the multilayer ceramic chip capacitor (MLCC) energy storage device. Its size varies widely for different applications, ranging from ultra-miniature (0.25 x 0.125 mm) to large (5.7 x 5.0 mm). The ultra-miniature MLCC, which is used in space constrained applications such as smartphones, hearables, wearables, etc., is manufactured by stacking alternating layers of ceramic dielectric material (insulator) and metallic electrodes, then sintering and applying external terminations. This process involves creating 50-100 thin ceramic sheets, printing electrode patterns on them, stacking the sheets, and then firing the stack at high temperatures to create a solid, monolithic structure that ranges in size from a few grains of rice to about a fingernail. Again, companies making camera modules for smartphones will need local supplies of image sensors, lens, infrared filters, digital signal processors (to convert images into digital format, etc.) The global market for camera modules was $43.3 billion in 2023 and is expected to be $68.5 billion in 2028, according to Markets and Markets. South Korea's LGInnotek, and China's OFILM and Sunny Optical Technology are among the large global manufacturers of camera modules. The skills needed for assembly-line operations and manufacturing components are also different. A diploma holder or electronics/mechanical engineer will be ready for assembly operations after about 30 days of training. For component manufacturing, the same talent will have to be trained for up to six months to become familiar with additional manufacturing lines, industrial gases, contamination control, temperature, pressure and working in dust free, ultra-clean environments, among myriad things. Smartphone-centric assembly EMS in India has largely been mobile phone-centric," says CII's Sharma. 'It's like a 4x400 relay race—we've run the first lap, but the remaining three are even more critical." The first leg of India's relay was defined by contract manufacturing of smartphones. Companies such as Foxconn, Wistron, Dixon, and others became the backend for Apple, Xiaomi, OnePlus, RealMe and other brands, while Samsung also scaled up, setting up a large smartphone factory in Noida. PLI-led manufacturing—where the government gives sops between 4-6% on incremental sales—not only made the country self-reliant (largely in smartphones) but also helped scale up local makers such as Dixon Technologies, Optiemus Infracom, Syrma SGS Technology. It also attracted global companies, including iPhone makers Foxconn and Pegatron, and electronic components makers Jabil Circuit and others. But assembly is not manufacturing, and setting up a component ecosystem will help address that lacuna. 'Our value addition in electronics is only 10–15%," says Saurabh Agarwal, tax partner and manufacturing practice lead at EY India. 'It shows that because of PLI, India is among the largest assemblers of phones in the world. But a lot needs to be done to increase local value addition. A lot of critical components are being imported." Also, unlike in smartphones, in the non-mobile categories, which include televisions, air conditioners (ACs), washing machines, IT hardware, and industrial electronics, the volumes are way less compared to what China does and hence makers can't derive economies of scale. In smartphones, India has a better record with around 300 million units being made (read: assembled) and Apple also ramping up production here. However, India still heavily relies on imports for products such as laptops, desktops, other IT hardware and key parts of TVs and washing machines. 'IT hardware players didn't have to make in India to sell in India as import duties were nil to low. Laptop and desktop companies weren't in the same predicament as phone makers like Apple or Samsung," says CII's Sharma. Made in India? CII's Sharma sees design as the third lap of India's EMS relay—and the most ignored. 'You can't build a brand without design. And unless Indian companies invest in original product and component design, we'll never have a Samsung or a Panasonic," he says. This view is echoed by Gupta of Boult. The company reported revenue of ₹3 crore in 2017, its first year, and in 2024-25, clocked ₹750 crore. For manufacturing, it relies on imports of key parts such as chips, drivers, and LED screens. 'We've set up our own SMT (surface mount technology, which embeds chips on a printed circuit board) lines and source plastics and packaging domestically," says Gupta. 'But core manufacturing still depends on global suppliers," he adds. The final lap, CII's Sharma believes, is about building brands. And here, India has stumbled repeatedly. One of the reasons often cited by the industry is lack of volumes. Local brands cannot compete with cheaper imports and are forced out. Though, this is changing in some areas, like ACs. India now makes 22-25 million ACs a year, up from 9-10 million a decade back. China is still the global AC hub with 90 million units, India now has the volumes, which justifies making PCBs for AC inverter controllers, which are currently imported from China. One way to create economies of scale is to collaborate rather than compete. For example, Ashok Gupta, chairman of Optiemus Infracom, argues that India lacks a 'we' culture. 'Instead of collaborating, Indian brands tried to go solo. Without economies of scale, they couldn't survive. The government gave us the PLI cherry. But industry players didn't work together to build the cake," says Gupta. Optiemus has four factories in Noida and makes drones, wearables, hearables, and telecom gear, among other products. It now manufactures for brands such as Realme, Noise, and Boat. EY India's Agarwal points out that companies can scale up from assembly to brands once they have the know-how. For instance, when Intel set up its factory in Taiwan back in the 1980s, local company TSMC benefited and today it is the largest contract manufacturer of chips in the world. New opportunities India's next challenge lies in building a broader industrial base. Companies such as Syrma SGS, Boult and Optiemus are positioning themselves to tap new opportunities in telecom, automotive, and medical devices. Even Lenovo, a Chinese company, has expanded its Puducherry facility to accommodate server manufacturing—an indication that India's next manufacturing chapter is beginning to take shape. But experts warn against over-reliance on incentive schemes. 'Your business model must be viable on its own," Optiemus' Gupta says. 'We have passed the first baton," CII's Sharma says, referring to his relay analogy. 'If we fumble the next stages—building components, design, and brands—we'll never win the race."

Time of India

12 hours ago

• Time of India

Urban challenge fund to focus on revitalising core areas of cities

Danny generated AI Image NEW DELHI: The next phase of central assistance (seed funding) for states to take up transformative projects under the Rs 1 lakh crore Urban Challenge Fund (UCF) will focus more on revitalising core areas of cities and fixing legacy infrastructure gaps, such as bad drainage, sanitation and polluted water bodies. Officials said the focus of this funding will be on projects that have a transformative impact. Centre will provide such financial aids to 500-1,000 small cities as well to take up projects, they said. The housing and urban affairs ministry has finalised the UCF scheme and it is likely to be launched soon, sources said. TOI on Jan 13 had reported that PM Narendra Modi has directed ministry officials to focus more on creating facilities, amenities and better transportation network in those areas of cities which naturally attract people and businesses, rather than developing new cities. Following the PM's direction, more thrust is now on having a better framework for transit-oriented development (TOD) for cities to push intensive and planned growth along transportation networks, the sources said. Speaking at a CII-organised conference, additional secretary in the ministry, D Thara, said, "In UCF, we are looking at revitalisation of cities and fixing of legacy infrastructure as a primary goal. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Memperdagangkan CFD Emas dengan salah satu spread terendah? IC Markets Mendaftar Undo We are not in a hurry to fund. We are clear that these projects should bring huge transformation and big impact. It can't be unfixing small things here and there. The project could be of any size but it has to be make a lot of difference to citizens. " The focus is not about building afresh but about fixing what already exists, she added. Officials said under UCF, govt is also likely to provide seed fund for developing new greenfield areas, with good rail connectivity, as future cities. In her Budget speech, finance minister Nirmala Sitharaman had announced the seting up of UCF to implement proposals for 'Cities as Growth Hubs', 'Creative Redevelopment of Cities' and 'Water and Sanitation'.

The Hindu

a day ago

• The Hindu

Inward ground, outward bound

A few weeks ago, Sunil Bharti Mittal, founder and chairperson of telecom major Bharti Enterprises and president of the Confederation of Indian Industry (CII) at the time, stepped on stage at a gathering of India's top industrialists and government officials, and spoke his mind. While a lot of what he said was to exhort his fellow corporate leaders — listening with rapt attention in a vast packed hall in Delhi's Taj Palace hotel — to do better, a sizeable portion was aimed at the government and how it could make doing business in India easier. Mittal's comments — at the gathering of India's 130-year-old business association — came at a significant moment. The Department of Economic Affairs of the Ministry of Finance had, just a few days earlier, noted that corporate India's increased investments abroad, at a time when it was turning cautious about investing within India, was something that 'warrants attention'. 'Industry will do everything possible to generate more employment, spend more on research and development, create import substitution, and expand its export basket. But we need your (the government's) help. We need enabling policies, especially in the area of ease of doing business,' Mittal emphasised. This kind of help from the government, he added, could be in corporate affairs, the easing of processes surrounding the listing of companies, and floating bonds in the international market. He also drew attention to costly and time-consuming litigation. 'There are lakhs and lakhs of crores stuck in litigation in direct taxes, indirect taxes, and other regulatory matters,' Mittal lamented, adding that the government should come up with a scheme like 'Vivad se Vishwas', which provides dispute resolution with respect to pending income tax litigation, for corporates as well. The scheme by the Ministry of Finance is currently aimed at individual taxpayers. It allows them to pay a certain portion of the tax amount that is currently in litigation and have the rest of the dues waived. 'The government will get very large amounts of money released by such a scheme (for corporates),' Mittal asserted. 'More money in the hands of the government today will give the necessary desired fillip to infrastructure and the various social programmes that are vitally needed and, importantly, release the industry from its past litigations and problems and allow it to reset and look into the future,' he said. It is this future of corporate investments in India that has come into question recently. The latest data from the Reserve Bank of India (RBI) show that outward investment by Indian companies has risen sharply over the last decade or so — from $4 billion in 2014-15 to more than triple that amount ($13 billion) just before the outbreak of the COVID-19 pandemic in 2020. Although this outward direct investment (ODI) dipped in the pandemic-affected year, 2020-21, it surged again thereafter, reaching $29 billion by 2024-25. To put this in context, while Indian investments abroad jumped by nearly 625% since 2014-15, foreign investments coming into the country grew by 79% since then. This trend continues in 2025-26, with data for April showing outward investment surging to $6.8 billion, exceeding the entire year's investment in 2014-15, and marking a significant increase from $3.5 billion in April last year. Big pull factors So, is this a push factor: where conditions in India are pushing companies to invest elsewhere? Or a pull factor: where opportunities abroad are so enticing that Indian companies can't help but take advantage of them? The answer depends on whom you pose the question to. Opportunities abroad, the need to acquire resources, and gaining access to technology and know-how are motivations for Indian companies. 'In recent times, we have had a lot of economic diplomacy,' says Delhi-based Ranjeet Mehta, CEO and secretary general of the PHD Chamber of Commerce and Industry. 'India is an emerging economic power. Today, it is the fourth-largest economy in the world and our companies are also growing bigger. In this process, Indian companies are globalising for market diversification.' The second reason for Indian companies to invest abroad, he explains, is resource acquisition. This is something that has now acquired a certain urgency, with China in April banning the export of critical minerals and rare earths as part of its trade tiff with the U.S. Resources are important for technology-related products, including electronics and batteries. 'There was a time when China was growing strongly and it acquired critical minerals in various parts of the world. Today, it is reaping the benefits,' Mehta says. 'If we do not have companies that are truly global, how can India hope to be a global power or, for that matter, truly 'Viksit (Developed)'?' He says only companies that have grown to a certain size and scale within India are thinking of acquiring foreign assets and expanding further. RBI data confirm this. For example, in 2024-25, Tata Steel invested $3 billion in its financial services subsidiary in Singapore, accounting for about 10% of all the outward corporate investment from India that year. Vedanta Limited, another multi-billion dollar company, with mines across India, was the second-largest outward investor, pumping $1.7 billion into its financial services subsidiary in Mauritius and manufacturing subsidiary in Saudi Arabia. In fact, Mauritius has seen the fourth-largest ODI from India (8%) from April 2023 to May 2025, as per the Department of Economic Affairs data. Singapore was the top destination (24%), followed by the U.S. (14%), and the UAE (9%). Other companies investing abroad include automotive components manufacturer Samvardhana Motherson International, earlier called Motherson Sumi; petroleum refining Bharat Petroresources, a subsidiary of Bharat Petroleum Corporation Limited; the biopharmaceutical Biocon Biologics; and Sun Pharmaceutical Industries — all multi-billion dollar corporations. Sector-specific gains There are also sector-specific factors that encourage Indian companies to look abroad. 'In the auto components sector, many companies have invested abroad,' Vinod Sharma, Noida-based chairperson of CII's National Committee on Electronics Manufacturing, explains. 'The industry works in that manner. If Volvo, for example, sets up a plant in a particular country, then the auto ancillary sector will move there too. If you see an opportunity, you go there.' RBI data show that transport, storage, and communication services together accounted for $2.3 billion of all ODI in 2024-25, placing it in the top five sectors in which Indian companies invested abroad. The top spot went to financial services, which accounted for $16.5 billion of ODI. Manufacturing — which includes auto ancillaries — took the second spot with $10.1 billion of ODI. Sharma adds yet another pull factor to the mix: that of Indian companies being wooed to take over ailing foreign ones. 'Some foreign companies may have gone bankrupt or not done very well. This is where an opportunity arises for Indian companies to make their move,' he explains. 'That country's government says this land and building are available, and invites other companies to come and invest. This is a case where a foreign investment becomes opportunistic as you are getting these assets at a cheaper price.' According to both Sharma and Mehta, the pull factors from abroad were the more important drivers of outward investment by Indian companies than the push factors from within India. 'I don't think that they are seeing that opportunities in India are limited and that's why they have to go abroad,' Sharma points out. 'Of course, there are places that are easier to do business in than India, but the Indian companies that are investing abroad have been operating here for a long time and are used to the system here.' The government, too, is of the opinion that greater foreign investment by Indian companies is an indicator of their increasingly global ambitions. 'The greater outward direct investment over the past few years demonstrates that Indian industry also realises that they have to grow and that if they need to scale up, they need to acquire technology, resources, and gain greater market access in other countries,' Amardeep Singh Bhatia, Secretary, Department for Promotion of Industry and Internal Trade, said while speaking at a business summit a few weeks ago. 'The greater ODI flows are an indicator of what is happening on account of that,' he said. Pushed to invest Not everybody is as sanguine about the situation in India. In a plush office in a high-rise corporate building in Noida, a senior executive of a multinational corporation laments that manufacturing in India is difficult and 'needlessly costly'. 'Look, it's not easy doing business here,' he says. 'Yes, things are getting better, but progress is slow. It is very difficult to scale up factories here, since buying land is very difficult. If you can't scale up, then you have to face higher costs,' he adds, not wishing to be named. He also points out that India's labour laws are 'extremely restrictive', which makes it more economical for companies to open several small factories in different States rather than a single large one. He agrees with Mittal about long litigation dampening business enthusiasm. 'Then there's tax-related harassment,' he says, with his voice dropping inadvertently to a slightly hushed tone. 'There's almost no company in India that is safe. You never know when a tax demand will come, and then you have to spend lakhs and sometimes crores fighting the case for years. Companies that have no choice will of course continue to do business here. But for those that can expand abroad, why would they not?' Separately, Anil Trigunayat, president of the Millennial India International Chamber of Commerce Industry and Agriculture, which works as a bridge between industry and the government, adds that investment goes where there is security and scope of good returns. 'While India has done extremely well in undertaking significant economic and legal reforms and its rankings in the Ease of Doing Business Index has improved greatly, archaic laws, retrospective implementation in some cases, taxation issues, land and labour laws, and bureaucratic hurdles are often cited as wrinkles in an otherwise promising landscape,' he explains. Trigunayat wants to see India in the top 10 in the Doing Business rankings, brought out by the World Bank since 2003. He hopes for economic reforms and robust arbitration mechanisms. Edited by Sunalini Mathew