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NEW DELHI:The Union Budget for 2022-23 has proposed customs duty changes on components of mobile phone chargers, camera lens of mobile phones and other parts of electronics devices including hearables and wearables. Mint had reported on the likely customs duty rejig on electronics components in the budget.
Customs duty rates are being calibrated to provide a graded rate structure to facilitate domestic manufacturing of wearable devices, hearable devices and electronic smart metres. Duty concessions are also being given on parts of transformer of mobile phone chargers and camera lens of mobile camera module and certain other items, Union finance minister Nirmala Sitharaman said on Tuesday while presenting her fourth budget.
"This will enable domestic manufacturing of high growth electronic items," she noted.
Mint had reported that the government was actively considering the proposal to lower duties for components of audio devices and wearables like smartwatches and smart bands, which could again come as a boost to local manufacturers. This is likely to be one of the new sectors where government expects exports to pick up in the coming years on the lines of success in mobile phone manufacturing and exports.
According to a vision document released by communications and information technology minister Ashwini Vaishnaw earlier this week, the segment is expected to rise to $8 billion in exports in FY26 from virtually nil exports in FY21, while electronics components exports are expected to near double to $17.3 billion versus $9 billion in the same period.
“Components such as battery packs, chargers, USB cables, connectors, inductive coils, magnetics, flexible PCBAs, charger enclosures active and passive components etc. can be manufactured in India within existing capabilities with modest policy support," said the government’s vision document which envisages India becoming a $300 billion electronics manufacturing powerhouse by 2026 from the current $75 billion. It said that India has a production potential of $25 billion worth of components, which is about 12% of the global spend.
The electronics industry had earlier proposed a staggered approach on levying basic customs duty on components such as printed circuit boards, batteries, speakers, mechanics, and cables between FY23 and FY26, while advocating stable tariffs. It had batted for reducing duty from present 20% to 5% in FY24, before scaling it up to 10% in FY25, and 15% in FY26 for PCBA. It had also called for duties on other components being kept at 5% for FY25 and 10% for FY26.
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