Smartphone Prices to drop due to a Customs Duty Reduction
By MYBRANDBOOK
A number of initiatives were unveiled by Finance Minister Nirmala Sitharaman to bolster India's electronics sector. These included a 20% reduction in basic customs duty on mobile phones, mobile printed circuit board assemblies (PCBAs), and mobile chargers, as well as a 15% increase in duty on PCBAs of certain telecom equipment. In order to ensure the availability of these materials for key industries like telecommunications, electronics, energy, space, defence, renewable energy, and nuclear energy, the budget also suggested reducing the basic duty on two of these materials and exempting 25 essential minerals and rare earth elements from custom duties.
“With a threefold increase in domestic production and almost 100-fold jump in exports of mobile phones over the last six years, the Indian mobile phone industry has matured,” Sitharaman said in her budget speech in Parliament. “In the interest of consumers, I now propose to reduce the BCD on mobile phone, mobile PCBA and mobile charger to 15%,”
To boost value addition in the domestic electronics industry, the government also proposed reduced BCD on oxygen-free copper used to manufacture resistors from 5% to nil, and BCD on specified goods for use in manufacture of connectors from 5% or 7.5% to zero.
Earlier this month, lobby group India Cellular and Electronics Association had asked the finance ministry to reduce input tariffs in the budget to reduce cost of production, increase local production of electronics and increase exports, especially given the lower tariffs and fewer slabs in countries such as China and Vietnam. It had wanted all tariff lines that raise costs significantly to be reduced to zero.
The association welcomed the budgetary announcements. “Our proposal for tariff slab rationalisation has also been acknowledged and the finance minister has announced that it will be taken up in the next six months. It will further embolden the industry and its competitiveness. We welcome the tariff concessions on the majority of critical materials which are used in strengthening the semiconductor ecosystem. The concessions are provided to the extent of nil from existing BCD slabs of 10% to 2.5% depending on the different critical metals. We also welcome the rationalisation of tariff on silicon quartz, silicon dioxide from 5/7.5% to 2.5%. This is a crucial step to propel the establishment of a strong silicon and power semiconductor wafer production ecosystem in the country,” Chairperson Pankaj Mohindroo said.
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