New Delhi: With the aim to give local manufacturers an advantage in competition with their foreign counterparts, the Union government has imposed 10% basic customs duty (BCD) on cellular mobile phones and specified parts of cellular mobile phones like a charger, battery, wire headset, microphone, receiver, keypad, USB cable etc and also certain other specified electronic goods.
The levy will apply beginning today. This had been a longstanding demand of the indigenous industry that was finding it difficult to survive the competition owing to the ridiculously low priced Chinese phones and components thereof due to a near total absence of regulations in China. Notably, even the American and European electronic brands outsource their manufacturing to China to bring down their costs drastically. This was affecting the ‘Make in India’ initiative as well.
Foxconn and iPhone maker Wistron will heave a sigh of relief, too, as they have invested heavily in their manufacturing units in India.
Such an effort to enable local manufacturers to face the competition had been in vogue for long, but GST threatened to offer electronic goods made abroad cheaper again. This additional announcement on customs duty tilts the scale back in favour of Indian mobile phone and component makers.
The government had constituted an inter-ministerial committee comprising officers from the Ministry of Electronics and Information Technology, the Department of Commerce, Department of Telecommunication and Department of Revenue to identify electronic, information technology and telecom products that are not bound by the Information Technology Agreement – I for customs duty enhancement on them.
The present exemption from basic customs duty on specified parts of mobiles, namely, printed circuit board assembly, camera module, connectors display assembly, touch panel, cover glass assembly, vibrator motor and ringer will continue.
Notifications /2017-Customs, 57/2017-Customs and 58/2017-Customs, all dated 30 June have been issued in this regard.