Smartphone makers want India to take the fight to China and Vietnam further

• Smartphone makers have urged the government to rationalise input tariffs.
• The India Cellular and Electronics Association has called for reduction of tariffs to three slabs.
• This, the body claims, will help India compete with other countries globally.

An association of smartphone makers has urged the government to look into input tariffs on smartphones and related components, asking for rationalisation. The India Cellular and Electronics Association (ICEA), as per a report by the Economic Times, has sent a request to the Finance Ministry, claiming that the current tariff regime has outlived its utility and put the country at a competitive disadvantage against countries like China and Vietnam.

The argument

The input tariffs, according to the association, puts India at a disadvantage when compared to other countries.

"The high input tariffs are completely incompatible with India's exports ambitions and put us at a massive disadvantage with countries like China, Vietnam, Mexico and Thailand," the ICEA said.

Therefore, ICEA has urged the Finance Ministry to rationalise the tariffs and match the input tariffs being offered by other countries in the next two years.

Limiting the tariff slabs

India currently provides a range of tariffs, including 2.5%, 5%, 10%, 15% and 20%. In addition to this, certain surcharges are also levied on the products.

"This is not only excessive but also results in nuisance tariffs such as those charged at 2.5% which fail to support domestic industry and also create confusion leading to disputes between the importers and custom authorities," the ICEA added.

The body has urged the ministry to do away with the above tariffs and limit them to 0%, 5% and 10%.

“Given the scale of electronics trade, which is close to $100 billion, we request that a senior level panel of two officials, one each from the ministry of finance and Meity be created to regularly provide accurate tariff classification for imports. Well-established principles should be used to reach conclusions,” the association added.

India’s export rise

The Indian government’s policies have given a good boost to the country’s smartphone production, for both domestic consumption and exports. India’s smartphone exports in FY 22-23 crossed the ₹85,000 crore mark, up from ₹45,000 crore during the preceding year.

In yet another milestone, iPhone exports in May 2023 crossed the ₹10,000 crore mark, taking the total smartphones exported from India in May 2023 to ₹12,000 crore.

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