Govt keen to give more incentives to manufacturers

The government is fighting tooth and nail to make the Make-in-India program (led by PM Modi) a success. The center is set to extend more incentives to push local manufacturing of components in a bid to make India a full-blown mobile component and accessories production hub in the next three to four years.

The incentives will come in the form of changed duty structures around mobile phone components such as camera module, printed-circuit board (PCB) and keyboards to expand the manufacturing base locally by next year. Although the changes in duty structure will take up in a phased manner.

For now, the finance department has temporarily brought down import duty from 29.5 percent to 12.5 percent on accessories that include mobile chargers, adapters, and headsets. In the current taxation regime, there is a duty protection of 10.5 percent for domestic manufacturers vis-a-vis importers and it allows a 2 percent levy on locally-made mobile parts.

"There is a provision to manufacture a few accessories in the Union Budget 2016-17. In the next three to four years' time, India will have a full-scale component manufacturing operational," Department of Electronics and IT additional secretary Ajay Kumar said. The push can have a multiplier effect in creating new opportunities including employment within the country, he added.

The focus on manufacturing is aimed at curbing imports of mobile components, which currently stands at 90 percent of the whole market. The biggest concern that the government is trying to abolish is that majority of these imports depend heavily on shipments from China and Taiwan.