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PCB Anti-Dumping Duty Affects IT Hardware PLI Recipients

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Domestic IT hardware manufacturers have been hit by the 30% anti-dumping duty that India introduced on PCBs in March 2024. 

According to industry experts, the anti-dumping duties on bare printed circuit boards (PCBs) imposed by the Centre in March for five years are making products manufactured by Indian IT hardware producers ‘unproductive’ worldwide.

The 30% anti-dumping duty (ADD) was imposed as a decision of the Commerce Ministry following complaints from six Indian PCB manufacturers, represented by the Indian Printed Circuit Association, regarding low-cost imports from China and Hong Kong.

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Under the notification, mobile phone makers are not required to pay import duty on bare PCBs. The exemption also applies to PCBs with over six layers, flexible PCBs, and other intricate designs.

Industry executives informed the Economic Times that the ADD on imported PCBs increases production costs for product-linked incentive (PLI)scheme products in India, reducing their global competitiveness. 

The cost rise is about 3-4% for lighting products, 1% for IT hardware, and 2-3% for telecom products. This poses a challenge for firms implementing domestic PCB assembly under the revised IT hardware PLI scheme’s localisation rules.

Besides, they have raised concerns about the imposition of the 30% ADD while the government promotes PCB manufacturing. The PLI scheme mandates production of bare PCBs from the second or third year, prompting questions about the timing of imposing anti-dumping duties in the scheme’s first year.

Twenty-seven companies, including Dell, HP, Dixon Technologies, Lava, Foxconn, Lenovo, and Optiemus, have pledged to manufacture IT hardware under the revised PLI scheme starting May 2023. The scheme, supported by a Rs 17,000 crore budget, requires participating firms to localise production, including PCB assembly, within the first year of operation.

According to the industry representatives, under PLI 2.0, PCB assembly starts in the first year with incentives, but the ADD notification imposes additional customs duty on bare PCB imports while exempting PCB assembly. 

They have already urged the commerce ministry to consider special treatment for ADD on PCBs across all PLI-supported products.

Printed circuit boards are an essential component for all electronic goods. An industry source told the Economic Times anonymously that companies import bare PCBs due to proprietary designs, which prevent easy modifications without a complete product overhaul, leading to global-local product discrepancies. 

Local PCB manufacturers require over 12 weeks for orders, contrasting sharply with Chinese firms’ three-week lead times. Bare PCB costs are minimal, with notebook PCBs averaging $7, which manufacturers currently absorb to stay competitive.

Domestic IT hardware manufacturers have been hit by the 30% anti-dumping duty that India introduced on PCBs in March 2024. 

According to industry experts, the anti-dumping duties on bare printed circuit boards (PCBs) imposed by the Centre in March for five years are making products manufactured by Indian IT hardware producers ‘unproductive’ worldwide.

The 30% anti-dumping duty (ADD) was imposed as a decision of the Commerce Ministry following complaints from six Indian PCB manufacturers, represented by the Indian Printed Circuit Association, regarding low-cost imports from China and Hong Kong.

Under the notification, mobile phone makers are not required to pay import duty on bare PCBs. The exemption also applies to PCBs with over six layers, flexible PCBs, and other intricate designs.

Industry executives informed the Economic Times that the ADD on imported PCBs increases production costs for product-linked incentive (PLI)scheme products in India, reducing their global competitiveness. 

The cost rise is about 3-4% for lighting products, 1% for IT hardware, and 2-3% for telecom products. This poses a challenge for firms implementing domestic PCB assembly under the revised IT hardware PLI scheme’s localisation rules.

Besides, they have raised concerns about the imposition of the 30% ADD while the government promotes PCB manufacturing. The PLI scheme mandates production of bare PCBs from the second or third year, prompting questions about the timing of imposing anti-dumping duties in the scheme’s first year.

Twenty-seven companies, including Dell, HP, Dixon Technologies, Lava, Foxconn, Lenovo, and Optiemus, have pledged to manufacture IT hardware under the revised PLI scheme starting May 2023. The scheme, supported by a Rs 17,000 crore budget, requires participating firms to localise production, including PCB assembly, within the first year of operation.

According to the industry representatives, under PLI 2.0, PCB assembly starts in the first year with incentives, but the ADD notification imposes additional customs duty on bare PCB imports while exempting PCB assembly. 

They have already urged the Ministry of Commerce and Industry to consider special treatment for ADD on PCBs across all PLI-supported products.

Printed circuit boards are an essential component for all electronic goods. An industry source told the Economic Times anonymously that companies import bare PCBs due to proprietary designs, which prevent easy modifications without a complete product overhaul, leading to global-local product discrepancies. 

Local PCB manufacturers require over 12 weeks for orders, contrasting sharply with Chinese firms’ three-week lead times. Bare PCB costs are minimal, with notebook PCBs averaging $7, which manufacturers currently absorb to stay competitive.

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