The year 2020 was not just a yearof coronavirus, globallock-downs, and efforts for makingthe coronavirus vaccine possible. Itwas also a year filled with mammothschemes announced by the govern-ment of India to promote indigenousmanufacture of electronics. Perhaps,the que that world is looking for an alternative to China in terms of elec-tronics manufacturing was one among the other factors for the government to chalk out the production linked incen-tive (PLI) scheme. The PLI scheme focuses on not only making India self-sufficient in terms of electronicsn manufacturing but also on making electronics goods for the world.
Come budget 2021,the govern- ment has once again cleared the air about its plans to encourage local manufacturing of electronics in the 56 March 2021 • electronics For you express The Union Minister for Finance and Corporate Affairs Smt Nirmala Sitharaman along with the Minister of State for Finance and Corporate Affairs Shri Anurag Singh Thakur arrives at Parliament House to present the General Budget 2021-22,in New Delhi on February 01, 2021 (Credit:https://pib.gov.in)
country. Needless to say, apart from global heavyweights of mobile manu- facturing, five Indian companies,including Lava, Bhagwati (Micromax),Padget Electronics, UTL Neolyncs, and Optiemus Electronics, have already been approved under the PLI scheme for smartphone manufacturing.
“The Union Budget 21-22 has widened our vision in many ways and reached new horizons. The govern-ment has increased outlays by unprec-edented amounts on many fronts to give a push to the economy. The expan-sion in capital expenditure has been the highest and so has been the budget for
all-round infrastructure development,health and wellbeing, power sector, skilling and education, and agriculture.
Electronics manufacturing has been given a further push by increasing customs duties on some products like mobiles, chargers, auto electronics, and solar equipment,” noted Rajoo Goel, general secretary, ELCINA.
Smartphones: The fastest growing consumer electronics segment in IndiaVarious parts and sub-parts used in manufacture of mobile phones in India, till the announcement of the latest budget, attracted zero basic custom duty (BCD). However, this story will change come April 2021—
the beginning of the new financial year in the country. Inputs, parts, or sub-parts for manufacture of speci-fied parts of mobile phones, includ-ing PCB assemblies (PCBAs), camera modules, connectors, wired headsets,USB cables, microphones, and receiv-ers, etc, as per the recent budget announcements, or as we call them, amendments, will start attracting 2.5percent BCD starting this April.
The move, which fairly seems tar-geted towards encouraging the local manufacturing of mobile phones in India, might also have an effect on brands not originating in India. While Indian manufacturers may find it a little easier to compete with the for-eign brands, the end consumers of
smartphones might find smartphones from their favorite brands (especiallyChinese) a bit expensive than usual.
No brownie points for mentioning the fact that the Chinese smartphone brands have been leading the market in India for more than five years (IDC,
Counterpoint, Techarc reports).What’s not to be missed here is the fact that during lockdowns, not
just Indian brands but brands from outside India (minus Chinese) had realised that depending on one source to fulfill component needs was filled with a lot of risk. The shortage of semiconductors that started hauntingthe automobile industry, starting with lockdowns, still continues to hover as black clouds over production facilities.
“During and post the lockdown, international supply chains were severely impacted, and due to high import dependence, domestic manu- facturing of electronic items declined sharply. Equipment manufacturers
have realised the perils of excessive dependence on foreign sourcing and are trying to develop domestic suppli- ers to overcome uncertainty associ- ated with imports. This has given a fillip to domestic manufacturers of components and also to EMS compa- nies which focus on PCBAs. ELCINA
believes that this momentum should sustain, and government schemes must support strengthening of domes-tic manufacturers, increase value addition, and create a self-sustaining value chain,” noted Paresh Vasani,
president, ELCINA.
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