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Budget 2018: Industry Leaders React To Import Duty Increase on Mobile Phones

Experts feel that the move to increase duty from 15% to 20% aims to promote local manufacturing of mobile phones in India.

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During the Union Budget of 2018, custom duty on mobile phones was increased by 5 per cent from 15 to 20 per cent.

The move to increase duty aims to promote local manufacturing of mobile phones in India. Major companies like Samsung and Xiaomi already have their manufacturing units in India. The companies like Apple and Google which don’t have their manufacturing units in India and rely on importing the handsets will be affected by the announcement during Union Budget.

The import duty has been increased third during the period of 12 months. In February 2017, 10 per cent duty was imposed, in December 2017, it went up by 15 per cent and now to 20 per cent. 

Vikas Agarwal, General Manager at OnePlus India, said, “Since the announcement of Make in India program 3 years back, over 85% of smartphones sold in country are now produced locally. So, this is opportune time to introduce next set of regulations to attract investment in the manufacturing sector and establish India as a global hub for electronics. At OnePlus, we are fully committed to the Indian market and welcome the proposed regulations. Currently, all OnePlus smartphones are produced locally and we are already exploring ways to further increase the share of local manufacturing to ensure there is minimal cost impact of any new regulations to the end customer.”

Mahesh Lingareddy, Founder & Chairman of Smartron, said, “Union Budget 2018 has given clear indications of a continued focus on the growth of new businesses in India. The announcement of increase in basic customs duty on mobile phones to 20 per cent is a concrete step towards fostering local manufacturing in India which would further fuel indigenous innovation.

This will allow us to build an innovation engine pipeline of several global brands in the country. As India's first global OEM and IOT brand with a vision of putting India on the global innovation map, the Union Budget would prove to be the necessary catalyst for our continued growth towards becoming a multi-billion dollar company globally.

India needs an investment (VC) ecosystem that can pump in US$15-US$20 billion every year to support and sustain a 5000+ startup ecosystem. Union Budget 2018 has taken the needs of the ecosystem into consideration by taking policy decisions to build a robust alternative investment regime in the country along-with a taxation model designed for the special nature of VC funds and angel investors. These policies and new taxation model would definitely help the start-ups to ensure survival and profitability over the years. As India’s first global OEM and IoT brand, Smartron believes in collective innovation and this year’s Union Budget would help us in our long term vision of bringing in the start-ups together on a single platform to innovate at the global level.”

Ashwin Bhandari, CEO iVOOMi India, said, It’s a welcome initiative towards make in India, in last 2 years ecosystem in India has already taken first level growth and situation has improved a lot. All the required resources for making the phones in India are stable, hence this will fuel industry growth, boom localisation to next level.

We at iVooMi will be changing over to 100% (currently is above 95%) make in India with this initiative and start the development of localisation for PCBA SMT, Battery complete unit, Transducers making in India to drive the growth to next level, “Targeting 2020 as Completely designed and Manufactured Phone In India”.

Further incentivising the higher level manufacturing (Surface Mount Technology, Injection Moulding, and Optical Electronics) is recommended to expedite the design and development within Indian ecosystem.

Sanjay Kumar Kalirona, CEO & Director, COMIO, said “The Union Budget-2018 is a positive step towards India’s growing smartphone market. The increased custom duty on mobiles will further boost local manufacturing and will be the essential push to create a manufacturing eco-system as well as boost local manufacturing of components & accessories in India. Smartphones play a crucial role in today’s times and this budget is an extension to the ‘Digital India’ initiative.  With focus on development, it is a progressive budget and is a stepping stone to India’s growth story. “Hope this can be incorporated in your esteemed publication.

Rajesh Aggarwal, Co-Founder Micromax, said, "The emphasis is on establishing a programme to bring in direct efforts towards building a holistic ecosystem for Artificial intelligence. The focus on AI is a welcome move towards technological advancements in India and an allocation of Rs 3073 crore for the Digital India scheme will certainly propel digital adoption and smartphone adoption in the country.

The increase in customs duty on Mobiles will encourage local manufacturing. As India is becoming the global hub for manufacturing, the measures taken by the government will surely grow confidence amongst the manufacturers and I strongly believe that this will further create business and human resource opportunities as well. Also, with the government’s move to invest in over 5 lakh WIFI Hotspots, will enable rural India to have Broadband access which in turn will be a significant stepping stone in the Digital India movement.

The government’s measures towards the import duty on printed circuit boards (PCBs), camera modules, connectors and other components that go into making smartphones, will boost the Make in India initiative and will relentlessly pursue in curbing imports and building value addition in the country. Micromax is deeply connected on the Make in India initiative with 3 running factories and we support this.