Mobile Phone Exports May Double on Trade Policy Tweak.

Mobile phone exports from India could double as a result of Commerce Ministry granting 2 per cent Focus Product Scheme (FPS) on mobile phone exports in the Foreign Trade Policy announced on Wednesday. Mr Pankaj Mohindroo, National President of Indian Cellular Association said that the special incentive accorded to mobile phone exports could result in the doubling of exports in the next 3-5 years from the annual level of Rs 13,000 crore to Rs 14,000 crore if other enabling policies are put in place. India is already a base for worldwide quality manufacturing with mega production clusters having come up in Sriperumbudur near Chennai and another one coming up in Noida near Delhi.

The new incentive will widen manufacturing to service the global and Indian markets. The cost competitiveness of India and the support of the Rs 40,000 crore domestic market has resulted in exports worth Rs13,000 crore. Mr Mohindroo said that India already has a large capacity for batteries, chargers and plastic parts and this can be extended to the entire range of components and accessories.

A recent study of the ICA Manufacturing Advisory Committee, promoted by the Department of Information Technology, has highlighted the potential for parts and components manufacturing in India. The study has recommended the widening of Assembling, Testing and Packing (ATP) to manufacture of PCBs and semi-conductors in the value added chain. The recognition in the export incentive scheme will be a big boost to component manufacturing, ICA said.
    
India is currently facing the onslaught of cheap sub-standard Chinese phones, which occupy as much as 25 per cent of the market, thanks to the liberal import policies of India. The boost to exports to mobile phones and their parts will encourage local manufacturing, which is the best answer to compete with the cheap sub-standard Chinese phones imports. The FPS scheme has been extended to static converters, optical disc drives, parts of mobile handsets, push button phones, telephone answering machines, standard wires cables of copper, optical fibre cable and parts of telecom transmission equipment.

Source : infraline.com