Synopsis
The revision of Basic Customs Duty (BCD) on key electronics components will enhance the 'Make in India' initiative and aid in achieving Prime Minister Modi's $500 billion electronics manufacturing goal. The adjustments include reduced duties on mobile phones and critical components, fostering local production and competitiveness in the industry.Key Takeaways
- Basic Customs Duty (BCD) cuts will aid local manufacturers.
- Reduction in duties on mobile phones and essential components.
- Elimination of customs duties on PCBAs and other components.
- Television manufacturers to benefit from duty exemptions.
- Government aims to correct inverted tariff structures.
New Delhi, Feb 1 (NationPress) The adjustment of Basic Customs Duty (BCD) on essential electronics products is set to fortify the 'Make in India' initiative and assist in achieving Prime Minister Narendra Modi's ambitious target of $500 billion for electronics manufacturing, industry experts stated on Saturday.
During the announcement of cuts in import duties on critical electronics components in the Union Budget, Finance Minister Nirmala Sitharaman mentioned that this exemption is part of a larger strategy to bolster the sector by lowering costs and promoting domestic output.
This initiative is aimed at enhancing India's electronics manufacturing landscape by making devices like mobile phones and smart LED TVs more affordable while reinforcing the country's position within global supply chains.
A significant modification involves a decrease in the basic customs duty (BCD) on mobile phones, mobile phone chargers, and printed circuit board assemblies (PCBAs).
The duty has been reduced from 20 percent to 15 percent, which is anticipated to aid local manufacturers and lower mobile phone prices for consumers.
To further bolster domestic production, the government has also eliminated customs duties on various crucial components utilized in mobile phone assembly.
Components such as PCBAs, camera modules, USB cables, and fingerprint readers, which were previously subject to a 2.5 percent tax, will now be exempt from duties. This move is expected to diminish production costs and render smartphones more affordable for Indian customers.
Television manufacturers will also benefit, as the customs duty on open cells used in LED and LCD TV panels has been entirely waived.
This adjustment is likely to lower production costs and make smart TVs more accessible.
As per Pankaj Mohindroo, Chairman of ICEA, "The streamlining of tariffs on vital inputs and components fosters a more competitive cost environment and promotes deeper integration with global value chains. Additionally, it will enhance India's competitiveness on the global stage."
Nonetheless, while some duties have been reduced, others have been increased. The customs duty on interactive flat panel displays has risen from 10 percent to 20 percent.
This decision is a part of the government's initiative to rectify the inverted tariff structure, where duties on raw materials or intermediate goods were occasionally higher than those on finished products.
FM Sitharaman also revealed that customs duties on cobalt powder, lithium-ion battery scrap, and 12 other critical minerals will be eliminated. These materials are crucial for manufacturing lithium-ion batteries, which are utilized in both mobile phones and electric vehicles (EVs).
According to Prabhu Ram, VP of the Industry Research Group, CyberMedia Research (CMR), the BCD revision will bolster 'Make in India', providing a significant boost to domestic champions such as Dixon.
