Handset makers expect the government’s proposal to increase duty on printed circuit board assembly (PCBA) and chargers to help significantly expand the local manufacturing capacity of the components. They, however, want a consistent long-term policy to make India an export hub.
On Saturday, the government proposed increasing the import duty on PCBAs to 20% from 10% and chargers to 20% from 15%, to encourage local manufacturing. This will help increase the local production of PCBAs by more than 100 million and chargers by 50 million units, said the companies for whom these are key inputs. Currently, 160 million PCBAs are produced locally every year. Data on chargers weren’t immediately available.
The PCBA duty hike is the right move for the industry, Lava International chairman Hari Om Rai told ET. “We must manufacture every single PCBA here now.” The move will enable the country to meet the target of manufacturing 100 crore indigenous mobile handsets and promote the domestic contribution to value chain of ESDM (electronic system design and manufacturing) to achieve $400 billion (Rs 28.6 lakh crore) of local manufacturing by 2025, said Prashant Singhal, EY’s emerging markets TMT leader.
Out of the targeted 100 crore mobile handsets, 60 crore, valued at about Rs 7 lakh crore, would be for exports. The government has set an ambitious target to increase smartphone exports from the country to $110 billion by 2025 from $3 billion now. Nipun Marya, the director of brand strategy at Vivo India, said the budget proposal was in line with the government’s focus on increasing local manufacturing.
The government has also proposed that fingerprint readers, ringer/vibrator and display and touch panel will attract 15%, 15% and 10% duty, respectively. “The duty hike for display and touch panel will come into effect in October,” India Cellular and Electronics Association chairman Pankaj Mohindroon said.
Source: economictimes.indiatimes.com