Pre-budget surprise: Center reduces import duty on mobile phone components to 10%

A day before the budget announcement, the Finance Ministry informed that the Center has reduced import duty on essential components for mobile phone manufacturing to 10% from the previous 15%.

The ministry said in the announcement that import duties will be imposed on components such as battery cover, front cover, middle cover, main lens, back cover, GSM antenna, PU housing, SIM socket, screws, other plastic and metal mechanical parts, and LCD foam. and sticker battery slots etc. have been reduced to 10%.

Pankaj Mohindroo, Chairman, Indian Cellular and Electronics Association (ICEA) said: “This is an important and welcome policy intervention by the government to improve India’s competitiveness in mobile manufacturing. Scaling up with low input tariffs is an important step in transforming India into a global electronics player. Key to manufacturing and export hubs.”

“Electronics has risen from the 9th position a few years ago to be India’s 5th largest exporter by 2024. Thanks to the PLI scheme, mobile phones account for over 52% of electronics exports. This is the first time in the past eight years that Import substitution crossed over to export-led growth sectors. In this transformation, the government has been a good and willing partner,” he added.

possible impact

While the actual impact will depend on a variety of factors, including how manufacturers respond to changes, consumer demand and the global economic landscape, the decision could have a positive impact on the industry and the overall economy.

As the cost for manufacturers to import key components falls, the price of mobile phones is likely to fall. It can also encourage domestic manufacturing as it is more cost-effective for companies. This is in line with the government’s ‘Make in India’ initiative to promote self-reliance and reduce dependence on imports.

Likewise, mobile phone manufacturing has the potential to create jobs if domestic manufacturing grows. This would have a significant impact on employment and help the economy. Likewise, as the manufacturing ecosystem flourishes, there are opportunities for technology transfer and collaboration between domestic and international companies.

Overall, the decision to lower import tariffs on mobile phone components appears to be an attempt to boost domestic manufacturing and spur economic growth in the technology sector.