Imported wearables to become dearer; diamonds, gemstones cheaper
PremiumDuty concessions extended to parts of transformers of mobile phone chargers and lens of mobile camera modules
Custom duties on several items such as diamonds and gemstones were cut in the annual budget, while those on wearable and hearable devices were “calibrated" to boost domestic manufacturing.
Imported headphones and loudspeakers are set to get costly too. The duty on headphones and earphones, whether or not combined with a microphone, and sets consisting of a microphone and one or more loudspeakers has gone up from 15% to 20%.
Yet in the long run some of these products are set to become cheaper as companies start manufacturing them in India. Finance Minister Nirmala Sitharaman announced a host of concessions aimed at boosting domestic manufacturing.
“Electronic manufacturing has been growing rapidly. Customs duty rates are being calibrated to provide a graded rate structure to facilitate domestic manufacturing of wearable devices, hearable devices and 28 electronic smart meters. Duty concessions are also being given to parts of transformer of mobile phone chargers and camera lens of mobile camera module and certain other items. This will enable domestic manufacturing of high growth electronic items," she said.
Deepesh Gupta, managing director at Molife World, maker of wearables in India, said eventually if the purchase price comes down for the manufacturer – as they buy from domestic sellers – it will get passed on quickly to the customer because brands play on price in a highly competitive space like hearables and wearables.
“The government’s intention of duty concessions and calibrating custom duty rates for electronic manufacturing will enable high growth for the ACE sector," said Eric Braganza, president, at industry body Consumer Electronics and Appliances Manufacturers Association.
Meanwhile, the government also announced plans to slash customs duty on cut and polished diamonds to 5%. At present, cut and polished diamonds as well as gemstones draw an import duty of 7.5%.
The cut in import duty on diamonds will help generate increased demand for diamond jewellery, said Suvankar Sen, CEO, Senco Gold & Diamonds.
“The government’s decision to reduce customs duty on cut and polished diamonds along with gemstones to 5% will surely provide much-needed relief to the jewellery industry as well as the end consumers. This will also encourage the consumers to move forward from traditional investment methods like gold, real estate, fixed deposits and try investing in coloured gemstones and diamonds," said Pawan Gupta, director, PP Jewellers.
Meanwhile, to disincentivize import of undervalued imitation jewellery, customs duty on imitation jewellery is set to go up. The government has also increased duties on umbrellas to 20% while also withdrawing exemption to parts of umbrellas.
Exemption is also being rationalised on tools for agri-sector which are manufactured in India.
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