NEW DELHI: Reliance Jio has rubbished allegations that it was trying to evade import duties by taking alternative trade routes to ship in its 4G feature phone JioPhone, saying it manufactures all those handsets in India.
Jio was responding to allegations by Indian mobile handset companies led by The Mobile Association (TMA) which claimed that Mukesh Ambani-led Reliance IndustriesNSE -1.47 % was not making the JioPhone locally.
“JioPhone devices are not made in India. As per our understanding, JioPhone devices are all imported from China. The telecom service provider (Jio) is now planning to import large volumes via Indonesia to enjoy 0% customs duty,” Bhupesh Raseen, chairman of mobile advisory committee at TMA, told ET.
Raseen added that a move to ship fully assembled devices from China via the country that is part of a block of 10 Association of Southeast Asian Nations (Asean) countries — with whom India has a free trade pact — would harm the government’s Make in India programme in which local firms have invested hugely.
India imposes a 20% basic customs duty on fully-built mobile phones shipped in from other markets, like China.
TMA is also planning to meet finance minister Arun Jaitley and top ministry officials to express the pressing concern.
Earlier this month, Ambani announced the JioPhone, its basic model of the 4G featurephone, will be sold for Rs 501 in exchange for any featurephone from July 21.
He also announced an upgraded JioPhone 2, priced at Rs 2,999, to be available from August 15. The company aims to take its base of 25 million JioPhone users to 100 million.
“JioPhone 2 to be available at an introductory price of Rs 2,999 from August 15, 2018, is being manufactured in India. JioPhone is also manufactured locally in India now,” a company spokesperson said.
The association said if Jio was permitted to offer a feature phone at a much lower price point, the businesses of mobile vendors like Karbonn, Lava, Jivi Mobiles and nearly 100 other brands will be rendered “uncompetitive and unviable overnight”.
It may even force the Indian brands, who rely for a bulk of their revenues on sales of feature phones, to shut down their manufacturing and sales operations completely.
Source: economictimes.indiatimes.com