Lower GST: After a dip of 5 percent in 2022, the number of smartphones sold in India is expected to increase by 10% year-on-year (YoY) for the year ahead, Counterpoint Research analysts have stated. Prior to coming up with the Union Budget 2023-24, smartphone companies are looking at a larger increase in the Production Link Incentive Scheme (PLI) and the streamlined customs procedures, in addition to other sops to boost smartphone sales this year.
A few of the industry associations as well as OEMs
and stakeholders believe that some duty structures must be changed since they are “burdening” the business. Xiaomi one of the leading handset manufacturers in India is anticipating more push by the government to support this PLI scheme & reduce GST to enhance its “Make In India” initiative.
“As India becomes a digital capability hub.
We anticipate the budget that is coming up to improve the overall competitiveness of manufacturing in the marketplace. The country has embraced advanced technologies and is also anticipating developments like 5G services. And AI, among others. So, the technology ecosystem will require a lot of backing from the government. To develop a sustainable system,” Muralikrishnan B, Vice President of Xiaomi India, told ABP Live.
“We expect to see more fervent support from the government. For this PLI scheme to boost the “Make in Indian” initiative. We believe that this initiative will help lead India in the right direction . And transform India into an international manufacturing hub,” the Xiaomi India president said. In line with similar sentiments, Sanmeet Singh Kochhar, VP-India, and MENA, HMD Global which manufactures and markets Nokia-branded smartphones stated: “A lot of hope is placed on the PLI scheme, which promotes increments in production-based incentives. It could take India’s exports up to a new level and also expand the range of exports.”
Although the country is enjoying optimism about technology.
There’s still a lot to be done to help support the digital-first agenda. And be able to achieve its goal of becoming an economy worth $5 trillion. Certain tax structures, like the GST on mobile phones, must be reduced to 12 percent of the budget. Compared to the current rate GST of 18 percent as they impact the ability of the industry to reach production targets.
Finland-headquartered HMD Global
also sought a rejig in customs duties on components or sub-parts of consumer electronics and smartphones.“Staggered method of the levying of basic customs duty on certain components. Like batteries, circuit boards printed on paper mechanics, speakers, and cables from FY23 to FY26. Then, it advocates for steady tariffs. “A great deal of optimism is in this PLI program, which promotes increments in production-based incentives. It is able to boost India’s exports to a record level as well as also broadening the basket of exported goods” Singh of HMD Global stated. “The present PLI system has enabled the production of large-scale quantities, which in turn, has created an excellent foundation for the development of the world-class manufacturing of components. With the budget coming up we’d like to see a positive step to create a vibrant local supply chain for components,” Xiaomi India’s Muralikrishnan stated.
The number of smartphones sold in 2023 could exceed 175 million.
Fueled by the introduction of 5G phones as per Counterpoint Research’s estimations. “We believe that 2023 will be the year of 5G widespread adoption. With 5G networks being developed and the government preparing to look at helping start-ups and industry players to develop useful use cases that showcase the practical applications of 5G that will encourage rapid 5G adoption,” Muralikrishnan said. However, the industry association India Cellular and Electronics Association (ICEA) which is supported by tech giants such as Apple, and Foxconn and morehas recently suggested that the present tariffs of 2.75 percent on parts of mobile phones, mobile phone components, and sub-assemblies should be eliminated as they impose a burden on manufacturers and could negatively impact the domestic sector.
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