The Global Trade Research Initiative (GTRI) has recommended against reducing import duties on electronic components for smartphone manufacturing in the upcoming budget, stating that the existing tariff structure has proven successful.
Budget 2024 Expectations (Image Source: iStockphoto)
The Global Trade Research Initiative (GTRI) has recommended against reducing import duties on electronic components for smartphone manufacturing in the upcoming budget, stating that the existing tariff structure has proven successful and altering it could negatively impact local production.
According to a GTRI report released on Monday, maintaining the current import duties between 7.5% and 10% would support the growth and long-term development of India’s smartphone market. According to the PTI report, it contradicts the demands of the India Cellular and Electronics Association (ICEA), which has advocated for import duty cuts on mobile phone components to boost domestic production and exports.
The GTRI emphasises that the current import duty rates facilitate duty-free imports for smartphone production intended for exports. The report suggests that Indian manufacturers should pay duties on smartphones sold within the country, while exports should be exempted. The think tank underscores the success of policy interventions, such as the production linked incentive (PLI) scheme, contributing to India’s smartphone industry’s remarkable performance.
The report highlighted that 98% of smartphones sold in India are locally manufactured, with exports surging from USD 7.2 billion in 2022 to USD 13.9 billion in 2023. GTRI warns against reducing import duties, as it might lead to the establishment of superficial assembly plants relying on imported parts, potentially harming sustainable manufacturing efforts in India.
The think tank argues that maintaining current import tariffs is crucial for sustaining the growth and depth of India’s smartphone manufacturing sector, aligning with strategic moves for sustainable economic development. The government is set to present the budget on February 1, 2024.
(With Inputs From PTI Agencies)
