Electronics sector to discuss tariff, reforms with PMO, finance ministry | News
The smartphone and electronics manufacturing sector is set to hold discussions with the Prime Minister’s Office (PMO) and the Ministry of Finance on tariff adjustments, business facilitation, and necessary reforms, according to a report by Moneycontrol.
These discussions are part of a broader initiative aimed at meeting the ambitious goal of $500 billion in electronics production by 2030, a target recently announced by Prime Minister Narendra Modi.
The report quoted Indian Cellular and Electronics Association (ICEA) chairman Pankaj Mohindroo as saying, “We are keen to have a presentation with the finance minister and PMO on the elements that are essential for the industry to achieve the outlined vision of $500 billion by 2030.”
ICEA, representing companies like Apple, Foxconn, Tata Electronics, Dixon, Xiaomi, Oppo, and Vivo, aims to collaborate with various government agencies to enhance India’s manufacturing potential and strengthen its role in global value chains.
Chinese companies
Manufacturers will also address the tax and legal obstacles encountered by Chinese smartphone companies, the report said. These Chinese firms are viewed as pivotal for boosting smartphone exports and developing a robust electronics components ecosystem.
In India, companies like Xiaomi, Oppo, and Vivo are facing legal issues related to customs duties, income tax evasion, and even allegations of money laundering.
Despite their importance for increasing smartphone exports, these Chinese companies have not significantly expanded their operations due to these challenges, the report stated.
To navigate these issues, these companies have started forming partnerships with local electronics contract manufacturers, such as Dixon Technologies and Bhagwati Product Limited, to leverage the production-linked incentive (PLI) scheme.
The Ministry of Electronics and Information Technology (MeitY) plans to introduce an incentive scheme for electronics components by October, with a proposed budget of Rs 30,000-Rs 40,000 crore.
The report quoted experts as saying that Chinese companies should establish operations in India through local partnerships to create a strong ecosystem.
After thorough evaluation, the government is expected to provide expedited approvals for Chinese companies seeking to enter the Indian market via partnerships to set up component facilities under this scheme, the report further said.
Electronics production
In FY24, electronics production reached $115 billion. To achieve the $500 billion target by FY30, the industry will need to maintain a compound annual growth rate (CAGR) of 20 per cent.
From FY17 to FY23, electronics production nearly doubled, increasing from $48 billion to $101 billion, largely driven by mobile phones, which represented 43 per cent of the total output.
In FY23, India’s electronics sector made a notable contribution to exports, accounting for 5.32 per cent of total merchandise exports.
The Indian Cellular and Electronics Association (ICEA) projects that the mobile phone sector will expand to a production value of $180 billion by the end of the decade.
First Published: Sep 18 2024 | 5:09 PM IST
