Budget 2023: GST Cut On Handsets, Simplified Customs, Greater Push For PLI And All That On Smar

After an estimated 5% decline in 2022, Indian smartphone shipments are projected to grow 10% year-on-year (YoY) this year, analysts at Counterpoint Research said. Ahead of the Federal Budget 2023-24, smartphone companies are looking to further push SOPs such as the Production Linked Incentive Scheme (PLI) and simplified customs to drive phone sales this year.

Some trade associations, stakeholders and OEMs are of the opinion that some mandate structures need to be amended because they are currently “burdening” the industry. Xiaomi, one of the country’s top mobile phone makers, hopes the government will go ahead with his PLI scheme and step up its ‘Make in India’ initiative.

“As India becomes a hub of digital capabilities, the upcoming budget is expected to improve overall manufacturing competitiveness in the market. India is embracing new technologies while preparing for advancements such as 5G services and AI. Therefore, the technology ecosystem will need a lot of support from the government to build a future-proof system,” Muralikrishnan B, president of Xiaomi India, told ABP Live.

“We expect further push from the government for the PLI scheme to strengthen the ‘Make in India’ initiative. We are optimistic to lead,” said Xiaomi. Added the President of India.

Echoing similar sentiments, Sanmeet Singh Kochhar, Vice President of India and MENA, which manufactures and markets Nokia branded mobile phones, said: India’s exports hit a record high and the export basket is diversified.”

While the country has a positive outlook on technology, it still has much more to do to support its digital-first strategy and reach its goal of becoming a $5 trillion economy. Some duty structures, such as her GST on mobile phones, are impacting the industry’s ability to meet production targets and should therefore be cut from the current rate of 18% to 12% within budget. .

Finland-based HMD Global also called for a review of tariffs on components and sub-parts for consumer electronics and smartphones.

“…from FY2023 to FY2026, shift the approach of imposing basic tariffs on components such as printed circuit boards, batteries, speakers, machinery and cables, and insist on stable tariffs.

“There are a lot of hopes for the PLI scheme, which advocates for progressive production-based incentives to boost India’s exports to new heights while at the same time boosting its export basket,” said MD Global’s Singh. Diversification is possible.

“The current PLI scheme ensures large-scale manufacturing and, as a result, has established a solid foundation for promoting a globally competitive component manufacturing ecosystem. We hope to see positive moves to promote the component supply chain of the ecosystem,” said Muralikrishnan from Xiaomi India.

Counterpoint Research estimates that total smartphone shipments will reach 175 million units in 2023 due to upgrades to 5G handsets.

“We expect 2023 to be the year of 5G adoption in a big way. 5G is spreading rapidly,” Muralikrishnan said.

Meanwhile, the India Cellular and Electronics Association (ICEA), a trade group backed by tech giants such as Apple and Foxconn, recently recommended removing the existing 2.75% tariff on parts, mobile phone components and subassemblies. It relieves the burden on manufacturers and puts the domestic sector at risk.