Government may waive bank guarantees for mobile component imports

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Mobile handset makers may get some relief as the government is expected to ease bank guarantee norms for import of components at concessional duty rates for local manufacturing.
Mobile-Components
The Prime Minister’s Office convened a joint meeting with industry and inter-ministerial officers last week to look into the impediments being faced by mobile makers in India.

Industry players raised concerns over huge capital getting blocked in bank guarantees given as assurance to customs that the items imported by them on concessional duty rates will not be retailed in the market and will be used solely for making mobile phones.

According to PTI the PMO has assured that it has noted concerns of mobile manufacturers on IGCR and will take it up so that at least the formalities of bank guarantee is waived for companies with good track record.

Bank guarantees of as much as Rs 290 billion have been furnished by companies.

A representative of the mobile company said to PTI that the accounting period of bank guarantees is 3 month for IGCR (Import of goods at concessional rate of duty for manufacture of excisable goods). A company cannot free the bank guarantee if the imported goods have been exhausted even in 5 days so the capital remains block for long period.

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