- In 2015, the mobile phone industry supported the implementation of PMP through grading import tariffs
- Currently, PMP has reached its limits and exceeded its limits, and its effectiveness is questionable
After the industry said it would not help India become a mobile phone export center, the Ministry of Commerce is reviewing the phased manufacturing plan (PMP).
In 2015, the mobile phone industry supported the implementation of PMP through grading import tariffs on equipment and components. But now it seeks to put it on hold until 2023, as the program has achieved partial success and exports require more incentives.
The Indian Mobile Phone Association recently communicated with Niti Aayog’s Chairman Amitabh Kant stating that it is clear that although PMP has helped the development of the ecosystem, it has reached its limits and exceeded its limits, and its effectiveness is questionable, reported Economic Times.
“For the time being, the mobile phone PMP be put in abeyance beyond 2018 levels till at least 2023. Conduct a thorough review of the levels of indigenisation, the number of companies and investments before any decision is made on continuing PMP, but not before 2023,” it suggested. The association pointed out that PMP led to a lawsuit against India in the World Trade Organization.
The current Indian scenario
Since the implementation of PMP in 2015, India has established more than 268 units, producing more than 225 million mobile phones per year, creating approximately 670,000 jobs. Some well-known companies in the global contract manufacturing industry, such as iPhone makers Foxconn and Wistron, have opened stores in India.
Currently, India imposes a 20 per cent tariff on imports of fully manufactured mobile phones to push companies to make in India. However, the components are charged at a lower rate.
While the levies helped create a local ecosystem for batteries, chargers and printed circuit board assembly, duties on components did not yield the same effect.