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EYE ON INDIA
BANGALORE, INDIA - Software developers were dealt a blowin the most recent Indian budget submission when the government said it would begin taxing software exports despite earlier promises to hold off on such taxes until 2010.
The sting of the proposed tax plan was relieved somewhat by another proposal to allow software companies here to invest as much as $100 million overseas.
Meanwhile, India's computer industry got a reprieve when the country's finance minister agreed to the industry's demand to push back elimination of all duties by two years, to 2005 (see March 4, page 32).
As a signatory to the World Trade Organization's Information Technology Agreement, India is required to eliminate duties by 2005. It had earlier volunteered to launch a zeroduty regime in 2003. But industry groups had recently argued thatthe original pledge was conditioned on the government's exempting all electronic components from customs duties and on other measures, not all of which have been undertaken.
India's annual budget for 2002-03 does propose cuts in customs duties on electronic components. Those duties have been criticized by industry, since the levies have often been higher on components and capital goods...