Handset makers have proposed the upcoming Union Budget bring some mobile phone components under the differential duty regime offered for locally-made devices. This will give a boost to both, the Make in India scheme and domestic component manufacturers. The industry wants India made components such as the keypad, USB cable, mic and receiver, die-cut parts and manufacturing of metal and plastic sub-components to attract lower duties or levies. The same components, when imported, should be charged a higher levy – akin to rules for mobile phones, chargers, batteries and headsets.
“Domestic manufacturing of mechanics is a major transformation for the industry,” said the Indian Cellular Association (ICA), which represents all major handset makers such as Apple, Samsung and Micromax, among others. “The principle of duty differential, phased manufacturing programme (PMP) and their continuation in the GST regime are crucial for a robust manufacturing ecosystem,” it said, adding that it will strengthen India’s position as a global mobile phone manufacturing and export hub. Mobile phones are at the forefront of the Prime Minister’s Make in India initiative. India has generated Rs 54,000 crore worth of locally-made phones in 2015-16, and is set to make it Rs 94,000 crore by this fiscal, from 175 million units. In contrast, ICA estimates that imports of mobile phones will drop 30% 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, the association said. ET has seen a copy of the proposal to the finance ministry as part of recommendations for the Budget, which also includes PMP implementation. ICA and Consumer Electronics and Appliances Manufacturers Association, another association that has interest of consumer electronics makers — including handset makers — at heart, have written to the government last month, asking that differential duty benefits be continued even when the goods and services tax (GST) comes into effect.