Union Budget 2024: Reduced Customs Duty to Boost Made-in-India Smartphones
In the latest Union Budget 2024, Finance Minister Nirmala Sitharaman announced a significant reduction in the basic customs duty on components of smartphones to 15 percent. This strategic move is set to make smartphones more affordable for consumers while also giving a substantial boost to the mobile phone industry in India.
Key Highlights of the Reduction
The reduction of customs duty on mobile phone components aims to help smartphone manufacturers cut the prices of their made-in-India devices. This is a welcome development, especially for the mass market segment, where consumers are on the lookout for budget-friendly yet efficient devices. However, it is essential to note that this reduction will not apply to smartphone devices imported as Completely Built Units (CBUs).
Expert Opinions
“This is a very positive step in the right direction. This can possibly rationalize prices, especially in the mass segments like below ₹25,000 and give growth in domestic consumption of phones.” – Navkendar Singh, Associate Vice President, IDC India.
Navkendar Singh’s perspective emphasizes how the price rationalization can enhance the affordability of smartphones for a larger section of the population, encouraging higher domestic consumption.
“The reduction of basic customs duty on smartphone parts to 15 percent is a pivotal step in deepening India’s smartphone manufacturing capabilities. This move is anticipated to further bolster local assembly, attract global investments, and position India as a global smartphone manufacturing hub.” – Prabhu Ram, VP – Industry Research Group, CyberMedia Research (CMR).
Prabhu Ram underscores the broader implications of the customs duty reduction: it not only strengthens local assembly lines but also makes India a more attractive destination for global investors, potentially positioning the country as a key player in the global smartphone manufacturing landscape.
Impact on Local Manufacturing
The decrease in customs duty is expected to positively impact local manufacturing capacity. Here are some potential benefits:
- Cost Reduction: With lower import duties on parts, the cost of production will likely decrease, paving the way for competitive pricing of the final products.
- Increased Investments: Lower costs attract more investments from both domestic and international players looking to set up or expand manufacturing units in India.
- Employment Opportunities: As more companies increase their manufacturing capacity, it will likely lead to more job opportunities and skill development among the local workforce.
- Enhanced Innovation: A stronger local manufacturing ecosystem can foster more innovation and research, ensuring that made-in-India smartphones keep pace with global trends and technologies.
Making Smartphones Affordable
For consumers, especially those eyeing the sub-₹25,000 market segment, this is exciting news. More affordable smartphones mean greater accessibility to advanced technologies for a broader audience, facilitating digital inclusion across the country.
Additional Highlights from the Union Budget
Beyond mobile phone parts, the Union Budget 2024 has also introduced other notable updates:
- Healthcare: A 100 percent exemption in customs duty on three specific medicines for cancer patients was announced, making these essential drugs more accessible.
- Medical Diagnostics: There is relief in customs duty on X-ray tubes and flat panel detectors, aiming to make medical diagnostics cheaper and more accessible.
Income Tax Revisions
Further insights were shared regarding changes in the income tax slabs:
Old Tax Regime vs. New Tax Regime
The Old Tax Regime offers a wide range of deductions and exemptions, while the New Tax Regime features a lower tax rate but limited deductions and exemptions, except for the standard deduction.
New Income Tax Slabs
In the New Tax Regime, the revised tax slabs are as follows:
- Up to ₹3,00,000: Nil
- ₹3,00,001 to ₹7,00,000: 5%
- ₹7,00,001 to ₹10,00,000: 10%
- ₹10,00,001 to ₹12,00,000: 15%
- ₹12,00,001 to ₹15,00,000: 20%
- Above ₹15,00,000: 30%
Conclusion
The reduction of customs duty on smartphone parts to 15 percent marks a significant step toward making smartphones more affordable and strengthening India’s position in the global smartphone manufacturing arena. Coupled with updates in income tax slabs and healthcare advancements, this budget aims to bring about positive changes for both consumers and industries.