The India Cellular & Electronics Association (ICEA) has proposed recommendations for the electronics industry in the upcoming Union Budget for FY25. These are largely aimed at attracting Global Value Chains (GVCs) to India and give a push to electronics production along with exports over the next five years.
Electronics and mobile phone manufacturers are seeking incentives amounting to Rs 40,000-45,000 crore to boost domestic production of mobile phone components. These incentives could be in the form of production-linked incentive (PLI) scheme or direct financial incentives or a combination of both.
This appeal has been made to the finance ministry and is expected to be considered in the upcoming Union Budget, as per an official from ICEA.
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“Sustaining the tremendous growth in mobile phone production and exports, requires matching the competitive tariff regimes of China and Vietnam. Current high tariffs increase manufacturing costs in India by 7-7.5% on the bill of materials (BoM), deterring local ecosystem development, hampering exports and adversely impacting job creation”, said Pankaj Mohindroo, Chairman of ICEA.
The association has proposed several measures to attract GVCs and enhance production scalability. These recommendations include reducing tariffs on components and subassemblies that are important for mobile phone manufacturing.
It also proposed consolidating India's current seven tariff slabs in the mobile sector into three primary slabs by 2025-0 per cent, 5 per cent, 10 per cent and 15 per cent.
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Besides this, it also advocated for reducing duties on essential components such as Printed Circuit Board Assembly (PCBA), charger adapters and mobile phones from 20 per cent to 15 per cent.
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