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TOG NEWS

Govt promotes indigenously-manufactured cellphones
By TOG News Service
Dec 14, 2019

TOG NEWS SERVICE, NEW DELHI, DEC 14, 2019: THE quantity and value of mobile phones including accessories imported by India during last three years are as follows -

(Quantity in Thousand and Value in USD Million)

ITCHS

Item Description

2016-17

2017-18

2018-19

Qty.

Value

Qty.

Value

Qty.

Value

85171210

Cellular mobile phone- Push button type

4856

48.00

37678

934.79

14753

399.96

85171290

Cellular mobile phones -others             (Smart phones)

70925

3739.95

52843

2602.50

12226

1216.51

Total

75781

3787.95

90521

3537.29

26979

1616.41

As per India Cellular and Electronics Association (ICEA), about 260 units manufacture cellular mobile handsets, including sub-assemblies/ parts and components in India. Most of the major brands (both foreign and Indian) have already set up their own manufacturing facilities or are in the process of doing so or have sub-contracted manufacturing to Electronics Manufacturing Services (EMS) companies operating in India.  The steps taken by Government to promote mobile handset manufacturing ecosystem in the country in this regard include:

  1. Rationalized tariff structure and a Phased Manufacturing Programme (PMP) for the promotion of manufacturing of mobile handsets and their sub-assemblies/ parts.
  2. Units manufacturing Mobile handsets and their sub-assemblies/ parts were also eligible for availing Capex benefits under the Modified Special Incentive Package Scheme (M-SIPS), which was open to receive applications till 31.12.2018.
  3. 100% FDI is permitted for manufacture of mobile handsets and their sub-assemblies/ parts.
  4. Specified capital goods for manufacture of mobile handsets are permitted for import at zero Basic Customs Duty (BCD).

Rationalization of tariff structure is an on-going process. Tariff structure has been rationalized to promote domestic manufacturing of electronic goods, including cellular mobile handsets. In the Budget 2018-19, BCD was increased from 15% to 20% on cellular mobile handsets. Presently, there is no proposal under consideration to increase BCD on import of cellular mobile handset beyond 20%.

The Government has taken following steps to encourage the indigenous mobile manufactures:

  1. In order to promote domestic value addition in cellular mobile handsets and their sub-assemblies/ parts manufacturing, a Phased Manufacturing Programme (PMP) has been notified. As a result, India has rapidly started attracting investments into this sector and significant manufacturing capacities have been set up in the country during the past four years. The manufacturing of mobile handsets and their parts/ components has been steadily moving from Semi Knocked Down (SKD) to Completely Knocked Down (CKD) level, thereby progressively increasing the domestic value addition. The production of cellular mobile handsets has gone up from Rs. 18,900 crore (6 crore units) in 2014-15 to Rs 1,70,000 crore (29 crore units) in 2018-19.
  2. The Government has notified the National Policy on Electronics 2019 (NPE 2019) on 25.02.2019, with the vision to position India as a global hub for Electronics System Design and Manufacturing (ESDM) and create an enabling environment for the industry to compete globally. Under the aegis of NPE 2019, Government envisages to promote domestic manufacturing and export in the entire value-chain of electronics to achieve a turnover of USD 400 billion by 2025. This includes targeted production of 1.0 billion mobile handsets by 2025, valued at USD 190 billion, including 600 million mobile handsets valued at USD 110 billion for export.
  3. The Electronics Manufacturing Clusters (EMC) Scheme was notified to provide financial support for creation of state-of-art infrastructure for electronics manufacturing units. Under the scheme, approval has been accorded for setting up of 20 Greenfield EMCs and 3 Common Facility Centres (CFCs) in 15 States across the country.
  4. The import of used plant and machinery having a residual life of at least 5 years for use by the electronics manufacturing industry has been simplified through the amendment of Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016, vide Ministry of Environment, Forest and Climate Change Notification dated 11.06.2018.

This information was given by the Minister of Commerce and Industry, Piyush Goyal, in a written reply in the Rajya Sabha yesterday.