Indian government in the Union Budget 2024-25 proposed to reduce the Basic Custom Duty (BCD) rates on mobile phone, mobile PCB, mobile chargers back to 15%. This was increased from 15% to 20% back in 2023.
Last year, the government reduced customs duty on import of camera lens and its inputs/parts for use in manufacture of camera module of cellular mobile phone from 2.5% to 0%.
This 5% reduction in import tax should decrease the price of the phones and chargers that are imported, including top-end Apple iPhone Pro series phones that are still imported.
We can expect Apple to announce a price cuts for the iPhone 15 Pro and iPhone 15 Pro Max models soon. Since the customs duty is also reducing for the PCBs, several mobile companies that import the PCBs should reduce the price of their phones. Price of the chargers that are imported should also reduce.
Regarding the mobile phone and related parts, Finance Minister Nirmala Sitharaman said:
With a three-fold increase in domestic production and almost 100-fold jump in exports of mobile phones over the last six years, the Indian mobile phone industry has matured. In the interest of consumers, I now propose to reduce the BCD on mobile phone, mobile PCBA and mobile charger to 15 percent.
Telecommunication
To incentivise domestic manufacturing, BCD for the telecommunication equipment is increasing from 10% to 15% on PCBA of specified telecom equipment, said the government.
Electronics
To increase value addition in the domestic electronics industry,
the government will remove the BCD, subject to conditions, on oxygen free copper for manufacture of resistors. The FM also announced that the government will exempt certain parts for manufacture of connectors.
Solar Energy
To support energy transition, the government has exempted capital goods for use in the manufacture of solar cells and panels in the country from 7.5%. Further, in view of sufficient domestic manufacturing capacity of solar glass and tinned copper interconnect, the FM said that the government will not extend the exemption of customs duties provided to them.
Commenting on the reduction in customs duty, Arijeet Talapatra, CEO, Transsion India, said:
Transsion India welcomes the Ministry of Finance’s decision to reduce the basic customs duty from 20% to 15% on mobile phones, mobile PCBA, and chargers. This policy change will significantly benefit both manufacturers and consumers, fostering a more competitive smartphone market and strengthen our position in the global market. This move will undoubtedly bolster the industry’s growth making smartphones more affordable, and we remain committed to the ‘Make-in-India’ initiative to bring the best-in-class smartphones to the ever-evolving Indian market.
Rajesh Doshi, Co-founder & Director at Zebronics, said:
The Union Budget 2024-25, announced by Finance Minister Nirmala Sitharaman, presents a robust vision for various sectors’ enhancement. The new tax regime reforms benefit law-abiding taxpayers. Job creation schemes are proposed across segments, particularly manufacturing, to drive “Vikasit Bharat.” Support for MSMEs and manufacturing includes long-term loans for machinery, credit guarantees, and establishing electronic manufacturing clusters, enhancing global competitiveness. Skill development initiatives introduce new courses, revise loans, and develop National Industrial Corridors to connect top companies with CSR funds, aiming to benefit over 1 crore youth in the next five years.
The reduction of Basic Customs Duty on mobiles and accessories and PCDA is a strategic move to support these industries. Overall, steps to ease trade, reform manufacturing, and support the start-up ecosystem are vital. Reforms in solar, energy, agriculture, and education are crucial for holistic national development. Notably, the commitment to enhance the inclusion of more women in the workforce by formulation of skill development programs and encouragement of more women entrepreneurs reflects the virtue of them being amongst the decision makers in the future.
CP Khandelwal, Joint Managing Director – HTech. CEO – PR innovations & PSAV Global. Establishing Amazfit and HONOR in India, said:
We congratulate the government on the Union Budget and are heartened to see the robust support for MSMEs and manufacturing sector. The credit guarantee scheme for MSMEs in the manufacturing sector, with coverage up to Rs 100 crore, is a game-changer. This initiative will spur innovation and growth, providing critical support to homegrown enterprises and elevating India’s position in the global manufacturing landscape.
The government’s decision to reduce the Basic Customs Duty on mobile phones, PCBs, and chargers to 15% marks a pivotal moment for our technology sector. This strategic move recognizes the significant maturation of the Indian mobile industry in recent years and is set to attract global value chains to our shores, enabling large-scale manufacturing operations.These measures collectively ensure a more resilient and innovative ecosystem, benefiting both the industry and consumers. This budget has not only addresses current challenges but also lays the groundwork for a prosperous and self-reliant India in the years to come.
Rajeev Singh, Managing Director, BenQ India and South Asia, said:
The Union Budget 2024, presented by Finance Minister Nirmala Sitharaman, has adopted a strategic approach for fostering economic growth while bolstering India’s technology landscape. The planned upgrade of 1,000 Industrial Training Institutes (ITIs) through a hub-and-spoke model, along with the alignment of course content to industry needs, reflects a proactive strategy to address the skills gap in the workforce and prepare students for the evolving job market. Such an emphasis on skill development and education bodes well for not only the emerging workforce but also interactive technology companies.
For display and interactive tech companies, which provide interactive flat panels and other technological solutions for educational institutions, this budget presents significant opportunities. The focus on upgrading ITIs and enhancing skill development aligns with the mission to support educational advancements through technology. By integrating interactive learning tools into these upgraded institutions, tech companies can contribute to creating an engaging and effective learning environment that fosters skill acquisition and prepares students for future challenges. This alignment between government initiatives and private sector capabilities is crucial for driving educational transformation in India.
Amit Khatri, Co-Founder, Noise, said:
The Union Budget 2024 presented by Finance Minister Nirmala Sitharaman is a visionary step towards inclusive growth, with a strong emphasis on manufacturing, upskilling, and women empowerment. Youth and participation of women in the workforce hold the key to India’s success. To this end, the focus on extensive training and skill development initiatives demonstrates a clear commitment to boosting employability and productivity. By linking job creation in manufacturing to first-time workers and offering EPFO incentives, the government is paving the way for a robust manufacturing ecosystem, creating 4 crore jobs over the next five years. It is certainly a commendable initiative to boost local manufacturing. Additionally, offering internship opportunities in the top 500 companies to 1 crore youth is a strategic move that will equip our young population with the skills and experience necessary to thrive in a competitive global economy.
The establishment of e-commerce export hubs in a PPP model is another significant step taken by the government and will significantly empower MSMEs and traditional artisans to compete internationally. It will open opportunities for Indian players to boost their reach globally while enhancing the ease of doing business and accessing new markets. India has long been an attractive consumer market for international brands, supported by our collaborative and business-friendly policies that enable seamless operations. The export hubs are an efficient step in unlocking similar avenues for homegrown companies, allowing a global stage for their innovation and entrepreneurial mindset, and strengthening India’s position in manufacturing.
Lastly, I feel the abolition of the angel tax will undoubtedly boost funding in the startup ecosystem, fueling innovation and growth. This move, along with incentives for job creation in the manufacturing sector and support for MSMEs, will not only stimulate valuable employment opportunities for millions of young people but also ensure economic resilience, laying a strong foundation for a powerful growth trajectory for India. Driven by the vision of Viksit Bharat, we look forward to actively participating in the nation’s journey towards global prominence and innovation leadership.