Industry body India Cellular & Electronics Association (ICEA) has requested mobile manufacturing companies to reduce import duties on parts used for making mobile phones and subsequently increase taxes on components to make the products manufactured in India under the Production Linked Incentive (PLI) scheme.
The association in its budget wishlist has stated a reduction in the goods and services tax (GST) to 12 per cent from 18 per cent at present since it was being perceived as a deterrent for growth of domestic market and manufacturers as well as checks in adoption of mobile phones by the deprived sections in the rural India.
ICEA chairperson Pankaj Mohindroo stated in a letter to the Ministry of Electronics and IT that the production linked incentive (PLI) scheme aims to offer an incentive for meeting partial cost disability for manufacturing in India compared with other countries such as China and Vietnam that existed before January 2020.
Even Samsung and Apple’s contract manufacturers are currently the biggest investors under the scheme and both the brands are known to have a dominating position in the mobile phone exports from India.
Under the PLI Scheme, the Government aims to manufacture mobile phones worth Rs 10.5 Lakh Crore.
Mohindroo also added that the government has introduced 15 per cent duty on camera lens and 2.5 per cent on rest of the parts, making camera modules production competitive in the country and has also called for rationalization of taxes as complete camera modules used in Phones can be imported by paying 11 per cent import duty.
The body has also issued instructions for the rationalization of duties on mother boards (printed circuit board assembly), mechanics components, etc used in mobile phones as well on components used for making mobile phone accessories like Lithium Ion cells for power banks, raw materials for wireless and audio devices etc.
ICEA has also stated that the hike in GST by 50 per cent in March 2020 to 18 per cent from 12 per cent should be rolled back as it slackens the digital India campaign and deters growth of manufacturers.
As of now, the share of Indian companies in the mobile productions category has come down from 47 per cent in 2016 to around 8 per cent at present.
