The mobile phone industry has appreciated the budget proposal to hike customs duty on mobile phones saying it will increase the share of local manufacturing. Also Read - OnePlus Nord CE 5G new update brings optimisations for overheating, cameras improvements
Finance minister Arun Jaitley announced a hike in customs duty on mobile phones to 20 percent from 15 percent in a bid to boost local value addition in domestic electronics manufacturing. Also Read - OnePlus aims to sell 25 million Nord phones by 2023, big plans ahead
Chinese firm OnePlus that operates in premium smartphone category said around 85 percent of all smartphones sold in country are now produced locally and this is an opportune time to introduce next set of regulations to attract investment in manufacturing. Also Read - Happy International Friendship Day 2021: Best tech gifts under Rs 2,000
“We are fully committed to the Indian market and welcome the proposed regulations. Currently, all OnePlus smartphones are produced locally and we are exploring ways to further increase the share of local manufacturing to ensure there is minimal cost impact of any new regulations to the end customer,” OnePlus India General Manager Vikas Agarwal told PTI.
China-based Xiaomi, a leading smartphone player in the Indian market, declined to comment on the Budget but it is learnt that more than 95 percent of the devices it sells in India is manufactured here so the customs duty hike would have little effect.
According to research firm Gartner the high-end devices are, however, likely to be impacted.
“More than 80 percent of mobile phone demand is met locally but premium, high-end smartphones still depends on imports which will get hit by proposed increase in duty.
Increase in duty will further strengthen proposals under consideration for local mobile phone sSproduction,” Gartner Research Director Anshul Gupta said.
Presenting the Budget, Jaitley said h was making a calibrated departure from the usual practice of reduction in customs duties. “The move will lead to creation of more jobs in the country,” Jaitley had said.
Besides the 5 percent custom duty hike on mobile phones, specified parts and accessories of mobile phones have seen a duty hike to 15 percent from the current range of 7.5-10 percent.
Domestic handset maker Micromax’s co-founder Rajesh Aggarwal said, “As India is becoming the global hub for manufacturing, the measures taken by the government will surely grow confidence amongst the manufacturers and I strongly believe that this will further create business and human resource opportunities as well.”
Concurring with him Panasonic India and South Asia President and CEO Manish Sharma said, “increasing customs duty on imported products and components to boost local manufacturing is consistent with the government’s Make-in-India initiative.”
The MSME sector, which forms the backbone of the electronics industry will also benefit from reduction in corporate tax from 30 percent to 25 percent and the allocation of around Rs 3,800 crore for the development of the sector will translate to strengthening the electronics eco-system at large, he added.