Mint Explainer: What major industries expect from the next government

For the tech sector, this means taking steps towards creating a semiconductor ecosystem, regulating AI, and passing and notifying various digital laws. The aviation sector expects more investments in airport infrastructure, policies to enable global aviation hubs, and less tax on jet fuel, while steelmakers want the new government to address their concerns about steel dumping from countries such as China and Vietnam.

Here's a lowdown on what crucial sectors want from the next Union government.

What's in store for tech and telecom in the first 100 days of the new government's term?

Prioritising the creation of a semiconductor ecosystem in India will be crucial for India’s self-reliance in these crucial industries. The government is expected to focus on setting up fabrication facilities (fabs), and component manufacturing and assembly units for such an ecosystem. 

The next government is also likely to bring into focus the AI Mission, which was cleared by the Cabinet of the previous government. AI regulation will require plenty of attention, too. 

The Digital Personal Data Protection Act will have to be notified and the Data Protection Board formed for effective enforcement and implementation of the law. But stakeholder discussions and deliberations are needed before these can be rolled out. 

Also read: Job creation, alleviating rural distress likely to top new government’s agenda

The upcoming Digital India Bill will be another key priority for the government, which wants Big Tech to tackle issues such as deepfakes and malicious AI-generated content. The industry, for its part, will want the government to preserve the safe-harbour principle to ensure that intermediaries are not held liable for third-party content posted on their platforms. 

There should also be more consultations on the new Digital Competition Bill, experts said, as it will have a significant impact on India’s digital economy. 

India’s telecom sector is much more stable than what it was a few years ago, after several rounds of financial and structural reforms. Rules under the new telecom Bill and tariff hikes will also be on the wish list. 

There shouldn’t be any major changes to the way the satellite-communications policy has been evolving, as Airtel-OneWeb, Jio-SES and Starlink are ready to offer services.

What is the industry expecting for sectors such as aviation and road transport?

India's civil-aviation sector expects investments in airport infrastructure, policies to enable global aviation hubs in Indian metros, support for setting up large-scale maintenance, repair and overhaul centres, and a reduction in tax. Fuel comprises 40% of airlines' expenditure and Indian carriers have long demanded that aviation turbine fuel be brought under the GST regime.

This is especially crucial because domestic air traffic grew by more than 147% to 152 million passengers in the 10 years to 2023, and international air traffic increased more than 49% to 69.64 million in FY24, according to data from the Directorate General of Civil Aviation. 

Also read | Lok Sabha Election: BJP’s popularity wanes even as NDA leads

For carmakers, discussions on incentives for electric vehicles and taxes on hybrids will be key, especially at a time when the government wants Tesla to come to India. Discussions around Corporate Average Fuel Economy (CAFE), which limits the amount of carbon dioxide a carmaker's fleet can emit in a financial year, will also be crucial.

What about core sectors such as steel and cement?

Indian steelmakers will want the new government to address their concerns about steel dumping from countries such as China and Vietnam, which has been hampering their pricing power. Steelmakers are presently among the largest private-sector spenders, with expansion projects underway at all leading primary steel companies. 

However, the government will have to perform a balancing act as restrictions on imports could decouple the India from price variations in the global market, pushing up the prices of the key commodity. Steel is a key input for large, government-funded infrastructure projects and for goods such as automobiles and consumer electronics. 

An unrestricted hike in prices could spark cost inflation across these sectors, hurting the spending power of both the government and households. In 2022 the government had in fact levied an export duty on Indian steel mills and iron ore producers to arrest runaway steel prices. 

Also read: Re-thinking Modi 3.0: Foreign policy amid resurgent coalition politics

Cement makers have seen a hit to demand from the elections, heatwaves and excess rainfall in some regions. But with statutory regulations on the real-estate sector showing promise, the housing sector is expected to gain momentum. Government housing schemes are likely to create demand for developers and, in turn, cement suppliers.

What about pharma and healthcare?

Pharma companies been seeking relief on direct and indirect taxes, as well as incentives to promote research and development to help the market grow from $50 billion at present to $130 billion by 2030. 

Also read: Putting wind beneath the economy’s sails

The healthcare industry meanwhile has advocated for an increase in healthcare spending to around 2.5% of GDP, rationalisation of GST, and fiscal reforms in the health insurance sector. The industry aims to become a hub for pharmaceutical and healthcare manufacturing, including the medtech sector, and has been seeking more collaborations among the government, medical-device companies, healthcare providers, manufacturers, suppliers and insurance firms.

What does the legal community expect?

India's legal community expects the new government to address the issue of pending cases in various tribunals, including the National Company Law Tribunal, the Income Tax Tribunal, and the Debt Recovery Tribunal. It also expects the government to tackle the problem of appointments, ensuring that tribunals are not treated as dumping grounds. 

The community is also looking forward to seeing the government pass various new technology laws, take steps towards regulating AI, and enact reforms to enhance the efficiency of the judiciary, which has been a long-standing demand.