Changes proposed in the duty structure for electronic components could help create a ₹10,000-crore industry in the next two years, say experts.

According to the Budget, local manufacturing of mobile chargers, batteries and headsets will attract only two per cent excise duty while imports will be slapped with 29.441 per cent. This is enough incentive for local manufacture of these components. Moreover, sub-components will also have significantly lower import duty.

“As per estimates, total production worth ₹7,000-10,000 crore of mobile adapters/chargers, batteries and wired headsets can be achieved by 2018 based on this initiative,” said Pankaj Mohindroo, president at The Indian Cellular Association.

However, he added that the industry is unhappy about the two per cent special additional duty levied on populated printed circuit boards (PCBs) used to make mobile phones and tablet computers. “India has not yet developed the ecosystem for the complexity involved in populating a mobile phone bare PCB.”

The PC industry was also hoping for similar incentives to make local manufacturing commercially viable. “While the Centre has focused on giving an impetus to domestic manufacturing, we were hoping to see the duty differential policy being extended to PC manufacturing but this did not happen,” said Rahul Agarwal, Managing Director, Lenovo India.

Sops for semiconductor

Incentives have also been provided for semiconductor wafer manufacturing which the Centre has been trying to kick-start for a while to seek self-reliance. Nearly ₹60,000-crore worth of investments in semiconductor wafer fabrication plants are stuck because of financial viability issues.

“Exemption of basic customs duty and special additional duty for assembly-test-mark-pack for semiconductor wafer fabrication/LCD fabrication is a well planned move which will boost local manufacturing, especially for SMEs,” said MN Vidyashankar, President, India Electronics and Semiconductor Association.

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