Handset makers propose lower duties on mobile components made in India

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In a bid to boost the Make in India campaign initiated by Prime Minister Narendra Modi, handset makers have asked the government to bring down the duties on mobile components.

handset makers, mobile components, India

The manufacturers have proposed that the upcoming Union Budget to bring components such as the keypad, USB cable, mic and receiver, and die-cut parts under the differential duty regime offered for devices made in India. The regime would make such components and manufacturing of metal and plastic sub-components attract lower duties.

The industry is also seeking duties to be imposed if the same components are being imported by manufacturers similar to the higher duties imposed on mobile phones, chargers, batteries and headsets.

The Indian Cellular Association (ICA), which represents all major handset makers such as Apple, Samsung andMicromax, among others, said that the principal of duty differential, phased manufacturing programme (PMP) and their continuation in the GST regime is crucial for a robust manufacturing ecosystem. It will further strengthen India’s position as a global mobile phone manufacturing and export hub.

The Make in India initiative stresses upon bringing manufacturing processes into the country and making the product development cycle self-sufficient. At the centre of this initiative is technology and mobile phones in particular. This is also aimed at generating more employment in the country. Following the roll out of the campaign, a lot of companies have set up their mobile manufacturing units in India.

ICA has estimated that imports of mobile phones will drop 30 percent by value in this fiscal to Rs 40,000 crore, from 110 million phones. The second level of PMP, under which exemption for the new set of components is being proposed, is estimated to create 1.5 million jobs by 2020 and 5.8 million by 2025-26.

Currently, imported mobile phones are levied a 12.5 percent countervailing duty while 1 percent excise duty is levied on domestic manufacturing, making local assembly 11.5 percent cheaper. The industry had also proposed 0 or 1 percent central GST and state GST at a 5 percent merit rate on all phones and tablets, along with their inputs and components, irrespective of whether they are imported or local.

By Baishakhi Dutta

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