Roll back of import duties on mobile phone components not in sync with encouraging mfg: BIF

New Delhi, May 19 (KNN) Recent decision by the government to roll back import duties levied on mobile phone components is a step not in sync with encouraging manufacture of these items in India, Broadband India Forum (BIF) has said calling for immediate withdrawal of the rollback.

Batteries, chargers, wired headsets, speakers and populated PCBs (printed circuit boards) used in the assembly of mobile phones in India are currently imported from China in fully-manufactured form and act as a big dampener to the basic objectives of the ‘Make in India’ and ‘Design in India’ campaigns by PM Modi and, furthermore, to the 'Net Zero Imports' by 2020 under the ‘Make in India’ initiative, BIF said.

BIF has appealed the Ministry of Communication and IT for immediate withdrawal of the Import Duty rollback on populated PCBs and phone accessories.

In its note to the Ministry, BIF has highlighted that no entity will design and invest in R&D in India if the PCB continues to be imported from China at 0 per cent (zero) duty in fully-manufactured form. Though the increase in duty on imported handsets by 12.5 per cent has increased manufacturing intensity of mobile phones in India from 5 million/year to 100 million/year, the local value addition is hardly 1 to 2 per cent. Therefore, increasing duty on populated PCBs is the next logical step.

TV Ramachandran, President, BIF, remarked, “While the industry was hoping the Government moved ahead with its 2015 initiative, this recent  announcement has pushed the country back to the days of phone assembly, instead of progressing to a phased-manufacturing regime.”

In its recent Notification (No 31/2016-Customs) dated 5 May 2016, the Government of India decided to roll back import duties levied on components of mobile phones in the Union Budget 2016. The notification brought down the duty on chargers, batteries and headsets from 29 per cent to 12.5 per cent (at par with that of imported handsets) and lowered the duty on populated PCBs (printed circuit boards) to 0 per cent from 2 per cent (instead of raising it to 12.5 per cent). (KNN Bureau)