Finance Minister of India, Nirmala Sitharaman presented the Union Budget 2023 at the Parliament today. One of the announcements she made was about electronic accessories like camera lens, lithium ion batteries and other component parts that are used to make mobile phones in India will get relief from the government on customs duties. The concessional duty relief will be valid for a year.
Government will provide relief in customs duty on import of certain parts like camera lens and concession on import of lithium ion batteries to further promote mobile phone production in India – FM @nsitharaman #AmritKaalBudget #Budget2023 pic.twitter.com/EFVJ0L6eJb
— All India Radio News (@airnewsalerts) February 1, 2023
The Finance Minister said, “Government will provide relief in customs duty on import of certain parts like camera lens and concession on import of lithium-ion batteries to further promote mobile phone production in India.”
As of now, it has not been specified how much relaxation will be provided to the companies on the customs duty. She also announced that the benefits will help the OEMs to launch 5G smartphones in the budget segment. The Indian Government will also set up 100 labs across the engineering institutions for developing 5G services.
Televisions to Get Cheaper in India as Well
Besides smartphones, smart TVs will also get cheaper in India due to the concession on customs duties on their internal component parts. Along with it, the custom duty on TV panels has been reduced to 2.5%. “To promote value addition in the manufacturing of TVs, I propose to reduce the Basic Customs Duty on parts of open cells of TV panels to 2.5%”, announced Finance Minister Nirmala Sitharaman.
Xiaomi, Nokia Reacts to Budget 2023
The Union Budget 2023 has attracted various reactions from the industry. Xiaomi’s Muralikrishan B said that announcements on dedicated research around 5G, AI and other disruptive tech, plus reduction of duties on mobile & TV parts, will boost India’s smart electronics manufacturing industry.
HMD Global Vice President Sanmeet Singh Kochhar, on behalf of Nokia, said that the announcement to further reduce custom duty is another great step in this direction.
India to be the Next Big Manufacturing Hub of Smartphones
The Indian smartphone industry has seen massive growth in recent years. According to Rajeev Chandrasekhar, Union Minister of Electronics & Technology, India is exporting mobile phones worth Rs 60,000 crore to other countries compared to just 10% in 2014. The smartphone market in India is estimated to grow 10% year-on-year (YoY) in 2023 as per a report from Counterpoint Research. Almost every smartphone brand is now producing its smartphones in India locally.
The Cupertino based tech giant, Apple exported iPhones worth $1 billion (Rs 8,100 crore) within a month recently giving Make in India a huge boost. Earlier Samsung used to be in first place. The Government of India has introduced Production-Linked Incentive (PLI) scheme to give these OEMs a major relaxation to make their products in India. These manufacturers are required to submit production, exports, investments and jobs data on a periodic basis to be a part of this scheme.
The Government of India estimates that the country will export smartphones worth $9 billion by Financial Year 2023 i.e. on March 31, 2023.
As per previous reports, Apple plans to accelerate shift more and more of its iPhone production to India due to the curbs in China. The company looks towards India as its next big manufacturing hub.
