After the speech of The Honourable Finance Minister Mr. Arun Jaitly, it is clear that we might see an 1% increase in prices of the mobile phones from April 2017. Reason's are simple central government proposal to levy customs duty on major component of a mobile phone such as PCB which constitutes more than fourth of the cost of a mobile phone.
The Government have proposed to impose 2% SAD (Special Additional Duty) on PCB used in mobile phones & to retrospective effect it had allocated 745 crore that will act like a catalyst to local mobile manufacturers. Clearly this move indicates to adequately protect the local mobile phone manufacturers and it will also initiate the present & incumbent mobile phone manufacturers and assemblers via special CKD (custom knock down)units to start manufacturing the major components like PCB & other allied accessories required to assemble a mobile phone in India. It does also help in Central Government "Make In India" project, there by it will increase the local employment opportunities, cut down the dependency of importing from countries like china, Vietnam etc that will invariably decrease the outflow of dollar payments thus maintaining favourable balance of trade.
Mobile Industry expects there will be 1.2% increase in cost because PCB does cost more than 50% to 60% of cost of the mobile. They have also requested the finance ministry to with hold proposed levy till 2018 as they expect till then there will be considerable infrastructure development required to manufacture the PCB locally. Added due to the uncleared percentage of duty that is going on to be levied for the finished mobiles as it will not help the local manufactures to take the advantages of proposed incentive in the value chain, future investment into SMT( Surface Mount Technology)lines required for populating PCB's.
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