Centre cuts import duty on phone parts. How will it help Made In India mobiles?

The import duty on parts such as battery covers, main camera lenses, back covers, other mechanical items of plastic and metal, has been reduced to 10%.

The union finance ministry announced on Tuesday that the government has reduced the import duty on certain parts used in mobile phone manufacturing from 15 per cent to 10 per cent, a move expected to enhance the country's electronics exports.

Representative Image: Mobile phone exports is projected to reach $15 billion in the current fiscal year. (AFP)

For which components is the import duty being reduced?

The import duty has been reduced from 15 per cent to 10 per cent for screw, SIM socket, or other mechanical items of metal for cellular mobile phone; battery cover, front cover, middle cover, main lens, back cover, GSM antenna/antenna of any technology, PU case/sealing gasket - other articles of polyurethane foam like sealing gaskets/case, sealing gaskets/ cases from PE, PP, EPS, PC and all other individual polymers or combination/combinations of polymers, and other mechanical items of plastic.

The other items that are set to attract a lower import duty are conductive cloth, LCD conductive foam, LCD foam, BT foam, heat dissipation sticker battery cover, sticker-Battery slot, protective film for main lens, mylar for LCD FPC, film-front flash, and side key for use in manufacture of cellular mobile phones.

The import duty on inputs used to manufacture these components has been cut to zero, the notification said.

How will it impact the mobile phone sector?

The central government has promoted India as a smartphone manufacturing hub, leading companies like Apple, Xiaomi, Samsung Electronics, and Vivo to expand their phone assembly operations.

"Duty cuts on the import of mobile phone parts would assist major global manufacturers in establishing large-scale mobile assembly lines in India and significantly boosting mobile phone exports," commented Rajat Mohan, a director at the tax consultancy firm MOORE Singhi, Reuters reported.

The move is expected to enhance India’s competitiveness in mobile phone manufacturing, according to a statement from the India Cellular and Electronics Association (ICEA).

What is mobile manufacturing scenario in India?

With global mobile companies already manufacturing in India, mobile phone exports from the country doubled year-on-year to $11.1 billion in the fiscal year ending March 2023 and are projected to reach $15 billion in the current fiscal year, as per industry estimates.