Union Budget 2022: Duty concessions being given to electronics to boost domestic manufacturing

The Finance Minister Nirmala Sitharaman at the Union Budget 2022 announced duty concessions for parts of mobile phones. This is to further boost domestic manufacturing of “high growth electronic items” in India. Sitharaman also said that electronic manufacturing has been growing rapidly in the country.

“Customs duty rates are being calibrated to provide a graded rate structure, to facilitate domestic manufacturing of wearable devices, hearable devices and electronic smart meters,” she said.

Sitharaman added that duty concessions are being given to specific components including “transformer of mobile phone chargers, and camera lens of mobile camera module and certain other such items.”

On the duty concessions, Navkendar Singh, Research Director, Client Devices & IPDS, IDC India said “While we await specific details on quantum on duty concessions, this is a welcome step. Wearables are seeing stratospheric growth in demand and shall continue to do so in India. As consumers mature into using more tech, other complementary devices like wearables will see growth. Making india competitive in its manufacturing to meet local demand as well as position India as a manuf and export hub for such devices is a good initiative.”

With duty concessions and domestic manufacturing boost, prices of electronics are expected to decrease. There has been an increase in prices of electronics, smartphones especially, owing to the ongoing chip shortage and other COVID-19 induced factors. The Union Budget 2021 had introduced a 2.5 per cent customs duty on smartphone components including PCBA, camera module, and connectors.

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