ICEA Chairman Pankaj Mohindroo said that the transformer industry in particular is hit hard
Seeking to realise maximum manufacturing in the country, industry body India Cellular and Electronics Association (ICEA) has requested the Centre to rationalise tariffs for imports of mobile phones’ components in the upcoming Union Budget of this fiscal.
“With the 2021-22 Budget, there were duty rate increases on the inputs of mechanics, power banks, connectors, PCBA, camera modules, chargers, and true wireless stereo. These were not envisaged by us or MeitY, and were not even a part of the PMP architecture,” said in a letter to Union Minister of State for IT Rajeev Chandrasekhar.
The ICEA has argued that after earlier policy interventions, the charger industry had got well established in India with more than 60 manufacturing units producing over 600 million chargers, with good exports as well.
“However, with the duties, the charger industry has gone into de-growth. The additional duty impact post-2021 Budget has been 6-7 per cent on the Bill of Materials of chargers,” read the letter.
ICEA Chairman Pankaj Mohindroo said that the transformer industry, in particular, is hit hard.
“Duty on inputs of the transformer were increased to almost the same level as the finished transformer. This duty can be accepted, and manufacturing in India developed, provided inputs are available at zero duty (as had been done till the 2021 Budget) to allow the industry to settle down,” he said.
Further, the duty on inputs of mechanics have been increased, which makes it impossible for the local manufacturing of mechanics to compete.
“The higher duty is increasing the product cost, which, in turn, is impacting end consumers during this pandemic situation. Therefore, in addition to the reversal of duty, reduction of the value addition norms from 15 per cent to 5 per cent will assist the exporter to import under the Advance Authorisation Scheme,” said Mohindroo.
Furthermore, the PCBA manufacturing has grown rapidly in India from Rs 5,000 crore in 2014-15 to Rs 90,000 crore in 2019-20. However, 2.5 per cent duty on some parts is unsettling. Components of PCB for mobile phones (FR4, copper, nickel, and gold) have seen steep increases in the imposed duty.
The imposition of 15 per cent duty on camera lenses and 2.5 per cent duty on rest of the parts make the production of camera modules in India uncompetitive, said Mohindroo.
“All duties on inputs to camera modules need to be withdrawn so that the industry is able to develop,” it added.