Electronics Tariff Changes to Boost Domestic Manufacturing

NEW DELHI: The Union budget for 2022-2023 has proposed changes to customs duties on cell phone charger components, cell phone camera lenses and other parts of electronic devices, including including hearing aids and wearables. Mint had mentioned the probable readjustment of customs duties on electronic components in the budget.

Customs duty rates are calibrated to provide a graduated rate structure to facilitate the domestic manufacture of wearable devices, hearing aids and electronic smart meters. Tariff concessions are also granted on parts of mobile phone charger transformer and mobile camera module camera lens and some other items, Union Finance Minister Nirmala said on Tuesday. Sitharaman, during the presentation of his fourth budget.

“This will enable high-growth domestic electronics manufacturing,” she noted.

Mint had reported that the government was actively considering the proposal to reduce duties on components of audio devices and wearables such as smartwatches and smart bracelets, which could again give a boost to local manufacturers. This is probably one of the new sectors where the government expects exports to pick up in the coming years thanks to the success of mobile phone manufacturing and exports.

According to a vision paper released by Communications and Information Technology Minister Ashwini Vaishnaw earlier this week, the segment is expected to reach $8 billion in exports in FY26, compared to virtually zero exports in FY26. in FY21, while exports of electronic components are expected to nearly double to $17.3 billion. against 9 billion dollars over the same period.

“Components such as batteries, chargers, USB cables, connectors, inductive coils, magnetic components, flexible PCBAs, active and passive components of charger cases, etc. can be manufactured in India within the limits existing capabilities with modest political support,” said the government’s vision document which envisions India becoming a $300 billion electronics manufacturing powerhouse by 2026, up from the current $75 billion. It said that India had the potential to produce $25 billion worth of components, or about 12% of global spending.

The electronics industry had previously proposed a tiered approach to levying basic tariffs on components such as circuit boards, batteries, speakers, mechanics and cables between FY23-26, while advocating stable prices. He had fought to reduce the duties from the current 20% to 5% in FY24, before increasing them to 10% in FY25 and 15% in FY26 for PCBA. It had also requested that duties on other components be maintained at 5% for FY25 and 10% for FY26.

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