India’s mobile handset exports more than double; overtake last year’s exports in just 8 months

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A special incentive scheme for the manufacture of mobile handsets and components may be unveiled in the upcoming budget. 

Mobile handset exports from India have more than doubled in the first eight months of the current fiscal year. This is on top of a 132 per cent growth rate in the last fiscal as well. The overall exports of mobile handsets from India were USD 2.6 billion in FY19, which has reached nearly USD 3 billion till November in the current fiscal, according to the Department of Commerce. After getting a boost from Narendra Modi-led government’s flagship campaign – ‘Make in India’, the industry is expected to get further incentives to increase its productivity. IANS had reported that a special incentive scheme for the manufacture of mobile handsets and components may be unveiled in the upcoming budget.

The government has already approved a special incentive package to promote large-scale manufacturing in the Electronic System Design and Manufacturing (ESDM) sector, which is called the Modified Special Incentive Package Scheme (M-SIPS). Under M-SIPS, the government aims to provide a subsidy of 20 per cent on capital investments in special economic zones (SEZs) and 25 per cent on capital investments in non-SEZs for individual companies.

Lucrative incentives and facilities in India have now been attracting premium mobile handset brands like Apple and One Plus, giving more value to the burgeoning sector. The production of mobile phones in India has shot up 8-folds in the last five years. Mobile phones worth $ 24.3 billion were manufactured in 2018-19, which was just $ 3.1 billion in 2014-15, according to the RBI annual report.

Meanwhile, Phased Manufacturing Programme (PMP) for mobile handsets and its related sub-assemblies introduced in the Union Budget 2015-16 also led to a jump in mobile handset production in India as it involved countervailing duty on mobile phone imports and differential excise duty for domestic mobile phone manufacturing. It has gave exemption of parts, components, and accessories of mobile phones from basic customs duty to encourage domestic manufacturing of mobile phones.