Centre Slashes Import Duty On Mobile Phone Components (Photo by Jonas Leupe on Unsplash)

The central government has reduced the import duty for components used in the manufacture of mobile phones. As per the government notification on January 30, the government slashed the import duty from 15 percent to 10 percent. This move, ahead of the interim Budget 2024, is likely to benefit the sector in terms of exports as well as manufacturing.

The import duty reduction was announced by the Union Finance Ministry. The reduction will be for various components, including battery covers, main lenses, back covers, SIM sockets, and other plastic and metal mechanical items.

On January 11, Reuters reported that India is planning import duty cuts on components for producing high-end mobile phones. As per this report, various firms in the sector have been advocating for reductions on several components to reduce the cost of manufacturing smartphones and to create a more competitive environment against rivals like China.

Meanwhile, the Global Trade Research Initiative (GTRI) recently urged the Centre not to cut import duties on electronic components used in making smartphones. GTRI also added that maintaining the current rates would help balance industry growth and long-term development in the country”s rising smartphone market.

However, this came in contrast to the demand by the India Cellular and Electronics Association (ICEA). In a recent report, the ICEA stated that import duty cuts on mobile phone components can increase domestic production of handsets. Reuters, citing ICEA, earlier reported that import duties on smartphone components, including camera modules and chargers, currently range from 2.5 percent to 20 percent. According to ICEA estimates, Vietnam and China dominate nearly 85 percent of the over $190 billion in mobile exports.