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India Imposes 10 Percent Tax on Import of Key Smartphone Components

A customs duty of 10 percent was imposed on PCBs that are already populated with components such as memory and chips, according to a federal government notification issued on Monday.

Reuters

Updated:April 3, 2018, 7:16 PM IST
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India Imposes 10 Percent Tax on Import of Key Smartphone Components
India Imposes 10 Percent Tax on Import of Key Smartphone Components (photo for representation)
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India has imposed a 10 percent tax on imports of key smartphone components, including populated printed circuit boards (PCBs), as it moves to step up local assembly of mobile devices in the world's second-biggest smartphone market. A customs duty of 10 percent was imposed on PCBs that are already populated with components such as memory and chips, according to a federal government notification issued on Monday.

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Populated PCBs account for roughly half of a typical smartphone's cost. Reuters reported last week that India was exploring new custom duties on such components. A 10 percent customs tax was also imposed on the imports of camera modules for phones and connectors. The taxes are part of Prime Minister Narendra Modi's phased manufacturing programme (PMP), a plan unveiled in 2016 to step up local value addition every year in smartphone manufacturing.

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Modi, who wants to turn India into a manufacturing powerhouse like neighbouring China, has gradually raised import taxes on low-value components such as batteries, chargers and earphones, pushing Indian firms to assemble them. The new duties could, however, lead to protectionist outcries from several countries with China, Canada and the United States recently raising concern at the World Trade Organization about India's imposition of duties on such devices.

Regarding the hike, Manish Sharma, CEO and President, Panasonic India and South-Asia said, “Hike in customs duty to 10% on smartphone components such as camera module and printed circuit board assembly is a progressive initiative undertaken by GoI to foster the local smartphone manufacturing ecosystem. At Panasonic, our endeavour is to ensure that all Panasonic mobile phones are not only assembled in India but also have Indian-manufactured populated PCB’s and we are already in the process of developing manufacturing capabilities in that direction."

He further added, "While the infrastructure is being set up, we are looking at absorbing maximum costs so that our end customer is not impacted. In addition, we also see an opportunity to support the infrastructure creation for the industry by bringing in sophisticated technologies to the country at a fast pace through our Panasonic Smart Factory Solutions division.”

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