Business

Indigenisation: India moots duties on key smartphone component: sources

Move expected to encourage foreign firms to expand domestic manufacturing base

Reuters April 01, 2018

India is the world’s second-biggest smartphone market. PHOTO: Reuters

MUMBAI/ NEW DELHI: India is exploring new duties on the import of a key smartphone component, according to two government sources, the latest in a series of moves aimed at boosting domestic manufacturing in the world’s second-biggest smartphone market.

India’s Ministry of Electronics and Information Technology has mooted a proposal to levy a 10% duty on the import of populated printed circuit boards (PCBs), two government officials told Reuters this week, declining to be named as the matter is not public.

A PCB is a bed for key components such as processors, memory and wireless chip sets that are the heart of an electronic device. Once populated with components, PCBs account for about half the cost of a smartphone. Currently, most manufacturers of smartphones import PCBs which are already loaded with components to India and then assemble them locally.

If India’s finance ministry clears the recommendation on new duties, these could be levied in a matter of days, say government and industry sources, thus making populated PCB imports more expensive and pushing players to locally mount components instead.

India’s finance, electronics and trade ministries did not respond to requests for comment.

In the near-term, such actions could spur players like Apple Inc to widen their limited manufacturing and assembly capabilities in India and give an edge to those like Korea’s Samsung Electronics and homegrown firm Lava, which already have machines to mount components onto PCBs.

Apple did not immediately respond to a request for comment.

China’s OPPO is also putting up surface mounting machines in a new facility it is building in north India, a company executive told Reuters in a recent interview.

The local unit of Foxconn, one of the biggest global contract manufacturers of electronics, also has the capability, according to two industry sources.

Published in The Express Tribune, April 1^st, 2018.

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COMMENTS (1)

Faisal | 6 years ago | Reply A thought for Pakistani policy makers. From textiles to Automotive and now Telecom we have not been able to take advantage of our large industrial /consumer base. If we had asked the top machinery makers to install machine manufacturing facilities in Pakistan when textile was booming (in the 80's) we would be having several large manufaturing concerns in Pakistan now. We should not miss the boat again as Pakistan has a very large cell phone user base and we should ask all major traders to also have specific targets to establish manufacturing bases in Pakistan. This should be replicated to other industries as well as there are very few industries inthe world with 200 Million plus consumers and majority young and carving for new technology.

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