Budget 2020: Govt to launch a new scheme to push mobile, electronics manufacturing in India

Union Finance Minister Nirmala Sitharaman Saturday proposed a new scheme for promoting the manufacturing of mobile phones, electronics, and semiconductor packaging in the country. She added that the potential of job creation in this segment is immense.

A detailed scheme with details will be released soon.

“The electronics manufacturing industry is very competitive and the potential in job creation is immense. India needs to boost domestic manufacturing and attract large investments in the electronics value chain,” Sitharaman said.

She further added that the scheme can be adopted for medical devices as well.

During the speech, she said that under Make in India initiative, well laid out customs duty rates were pre-announced for items like mobile phones, electric vehicles and their components, which has ensured gradual increase in domestic value addition capacity in India.

“Customs duty rates are being revised on electric vehicles, and parts of mobiles as part of such carefully conceived Phased Manufacturing Plans,” she added.

The government, under the National Policy on Electronics 2019, had set a target of making 100 crore mobile handsets indigenously by 2025, valued at about Rs 13 lakh crore. It had also set a target to promote domestic manufacturing in the entire value-chain of ESDM (electronic system design and manufacturing) to achieve a turnover of $400 billion (Rs 26 lakh crore) by 2025.

The value of electronic equipment manufactured in the country has increased to Rs 4.58 lakh crore in 2018-19, from Rs 1.90 lakh crore in 2014-15.

Out of the 100-crore mobile handset manufacturing target, 60 crore units will be for exports valued at about Rs 7 lakh crore.

The government has set an ambitious target to increase smartphone exports from the country to $110 billion by 2025 from $3 billion now.

Indian Cellular & Electronics Association, which has Apple, Foxconn, Xiaomi and Flextronics among its members, had previously flagged subsidy for machinery & equipment, cost of power, incentive for supporting industry, labour subsidy, logistics and reduction of land rentals as other disabilities India faces in comparison to rivals such as Vietnam.

The Indian government on Thursday restored the 2 percent additional duty incentive under the Merchandise Export from India Scheme (MEIS) on mobile phone export. Mobile handset exports grew over eight-fold to Rs 11,200 crore in 2018-19, and exceeded imports for the first time, as per Indian Cellular and Electronics Association (ICEA) data.