Duty free handsets from SEZs would hit local manufacturing units set up under PMP

New Delhi, Dec 17 (KNN) Indian Cellular & Electronics Association has written a letter to finance Minister Arun Jaitley and IT minister Ravi Shankar Prasad over negative impact of allowing companies to sell devices made in special economic zones (SEZ) at zero duty rates in the domestic market on the local manufacturing units.

Such a move would be “without any substantial value addition” and would also kill the 268 factories set up in the phased manufacturing plan (PMP), Pankaj Mohindroo, president of the Indian Cellular & Electronics Association, said in the letter.

According to a media report, Mohindroo said over Rs 5,000 crore had already been invested in these 268 units, while Vivo, Oppo, Samsung and Wistron were among those that had received approvals for investments under Phased Manufacturing Plan (PMP).

Any further relaxation in supplies from SEZs to the domestic market can result in an “immediate existential crisis” for the local industry, Mohindroo said. 

The government had identified 12 components used in mobile phones to be assembled locally in phases until 2019-20, under PMP.

It aims to promote indigenous manufacturing of populated printed circuit boards, camera modules and connectors in the current financial year and display assembly, touch panels, vibrator motors and ringers in 2019-20.

PMP has been at the heart of spurring local manufacturing under the government’s Make in India programme.

The programme will be extended as the manufacturing ecosystem evolves over the next few years.

SEZs were set up to encourage foreign investment and promote exports from India.

SEZ units may sell goods and services in the domestic market in accordance with the import policy and on payment of applicable duties.