PCBA, charger duty hike to drive local handset ecosystem capacity: Handset makers

Handset makers on Saturday said that the government’s move to increase duty on PCBA from 10% to 20% and chargers from 15% to 20% will lead to further manufacturing of 100 million-plus PCBAs and 50 million-plus charger.

“India has already built very large capacities,” ICEA Chairman Pankaj Mohindroo said.

Lava International Chairman Hari Om Rai said that the PCBA duty hike is the right thing for the industry. “We must manufacture every single PCBA here now. The new mobile scheme will help to fulfill the vision of policy.”

Nipun Marya, Director – Brand Strategy, Vivo India said the budget’s significant focus on local production of mobile phones, electronics, and semiconductor packaging is going to propel the Make in India vision further. “We are excited about the detailed scheme, which will follow soon.”

ICEA also welcomed the government’s tightening of the rules to check the misuse of FTA especially ASEAN by an escape route for duty-free imports which circumvent the duty structure.

The move will impact players like Reliance Jio which uses Samsung’s telecom equipment imported under a free trade pact between India and South Korea.

Mohindroo said that the special fund for the sector primarily focus on Mobile phones and high-value addition components like semiconductor ATMP will create the necessary momentum to build the $190 billion mobile phone industry with exports of $110 billion as envisaged in NPE 2019.

ICEA said that the push to FDI in terms of withdrawal of Dividend Distribution Tax along with the recently introduced lower Corporate tax of 15%/ 22% will be a major boost to existing FDI and also act as a signal to the funds waiting outside to utilize the investment window opening in the economy.

“This makes India a very attractive destination for further substantial growth in FDI inflows,” Mohindroo said.

He also welcomes that introduction of Section 28DA in the Customs Act which enables that preferential tariff treatment can be suspended denied in certain cases where importers are not fulfilling the obligation imposed on them and also where time-bound verification from the importing country is not forthcoming.