The electronics industry has reportedly requested a reduction in import duty on key components used in mobile phone manufacturing, including inductor coils, mics, and printed circuit boards, in the upcoming budget. The industry has also sought for subsidies for mandatory testing and certification, extension of 15 per cent corporate tax waivers for manufacturing companies, a technology acquisition fund, and dedicated manufacturing clusters.
Further, phone makers have requested a 10 per cent duty cut on mics, receivers, speakers, and flexible printed circuit assemblies to 10 per cent (from 15 per cent now), and duty-free imports of printed circuit board assembly parts, which are subject to 2.5 per cent duty at present.This is crucial as India’s effective tariffs on mobile phone inputs still range from seven per cent to 7.2 per cent, which is significantly higher than China and Vietnam.
The India Cellular and Electronics Association (ICEA) has suggested duty-free import of inputs and sub-parts of sub-assemblies/components, five per cent duty for certain component parts and 10% tariff for sub-assemblies and components. Meanwhile, according to the Electronic Industries Association of India (ELCINA), the government should consider providing financial incentives or establish subsidised testing and certification facilities, specifically for micro, small and medium-sized (MSME) companies, along with increasing testing capacity.
In addition, it has requested to extend the 15 per cent corporate tax waiver for manufacturing companies till March 31, 2029, to encourage establishment of new manufacturing ventures in the component sector. This should be combined with a dedicated incentive package to build the component ecosystem in dedicated clusters.
