The Indian government is considering reducing import duties on essential components used in the production of high-end mobile phones in a move to further bolster the country’s booming mobile phone manufacturing industry.
According to officials, the surge in mobile phone manufacturing has been exponential, reaching an impressive Rs 3.5 lakh crore in 2022-23. This marks a staggering growth of 1,700 per cent in just 7 years, from Rs 18,900 crore in 2014-15. Rajeev Chandrasekhar, Minister of State for Electronics and IT, highlighted India’s evolution from being insignificant in the global electronics supply chain to emerging as a significant and trusted player in the electronics global value chain.
To drive the transformation of domestic manufacturing from import substitution to export-led manufacturing, the government has already reduced the basic customs duty (BCD) to 10 per cent from 15 per cent for goods used in the manufacturing of mobile phones. This has led to a substantial increase in mobile phone exports, skyrocketing from Rs 1,566 crore in 2014-15 to about Rs 90,000 crore in 2022-23, indicating an impressive growth in exports by over 5,600 per cent.
The government has set an ambitious target of achieving $300 billion in domestic electronic manufacturing by 2026, and to achieve this, it is focusing on broadening and deepening electronics manufacturing in India. Efforts to attract global electronics manufacturers and brands, developing component ecosystems, fostering the design ecosystem, and nurturing Indian champions are all part of the strategy to mitigate industry cost-related challenges.
The success of the Production-Linked Incentive (PLI) scheme for mobile phones has paved the way for the introduction of the PLI for IT hardware and servers, which is expected to further boost investments in the component ecosystem and enhance the supply chain within the country. The government’s vision is to position India as a global hub for export-driven manufacturing and electronics system design and manufacturing (ESDM) by encouraging and driving capabilities in the country for developing core components, including chipsets, and creating an enabling environment for the industry to compete globally.
The reduction in import duties for essential components used in high-end mobile phones is part of the government’s larger effort to make India a competitive and attractive destination for electronics manufacturing. By attracting global manufacturers and brands, as well as developing robust component ecosystems and nurturing a strong design ecosystem, the government aims to make India a global force in the electronics industry.
The surge in mobile phone manufacturing and exports is a testament to India’s growing prowess in the electronics manufacturing sector. With the government’s strategic interventions and policy initiatives, the country is well on its way to achieving its ambitious targets for domestic electronic manufacturing and cementing its position as a key player in the global electronics supply chain.