Reduce duty on mobile phone parts: ICEA
NEW DELHI : Mobile phone exports from India can more than triple to $39 billion over the next two years, from $11 billion in FY23, if the government reduces import tariffs on components, and eliminates them in some categories, the Indian Cellular and Electronics Association (ICEA) said on Wednesday. These shipments can even swell to $50 billion, if India rationalises import duties and undertakes reforms to ease doing business, the industry body said.
The mobile phone industry association has urged the government ahead of the interim budget to have just three import tax slabs of 0%, 5% and 10%, down from seven, so as to simplify tariff applicability and reduce potential litigations. They have argued that reducing the duties will unlock manufacturing competitiveness, which can buoy exports.
The country needs to reorient its strategy from import substitution to exports-oriented growth, as 99.2% of the phones sold in India were made locally, the association emphasized. Back in 2014-15, India imported 78% of its phone requirements.
“We had asked for higher duties earlier to protect local manufacturing ecosystem, but now if we don’t have lower duties on components and sub-assemblies, we will not be competitive in the global market," said Pankaj Mohindroo, chairman of the association. He added that the lower import duties or zero duties in some components can help India compete with manufacturing countries like Vietnam and Mexico, even as the country aims to lure global value chains away from China.
The Indian mobile industry is expected to make about $50 billion worth of mobile phones in FY24, which is likely to rise to $55-60 billion next fiscal year. Exports are likely to rise to about $15 billion in FY24, and then to $27
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