The Union Budget 2020 highlighted the government’s focus on the development of the electronics industry and its potential for job creation. A scheme has been proposed to encourage the manufacturing of mobile phones, electronic equipment and semi-conductor packaging, details of which will be announced later. “This will create the necessary momentum to build the 190-billion-dollar mobile phone industry with exports of 110 billion dollars as envisaged in NPE (National Policy on Electronics) 2019,” says Pankaj Mohindroo, chairman, India Cellular & Electronics Association.
“The electronics manufacturing industry is competitive and India has shown its cost advantages. India needs to boost domestic manufacturing and attract large investments in the electronics value chain,” said the press release from the finance ministry.
According to the Economic Survey, by integrating ‘Assemble in India for the world’ into ‘Make in India’, India can create 4 crore well-paid jobs by 2025 and can raise its export market share to about 3.5 percent by 2025 and 6 percent by 2030. The Budget also announced the withdrawal of the Dividend Distribution Tax, along with a reduction in the corporate tax, which will be a major boost to the existing FDI norms. This will make India an attractive destination for further substantial growth in FDI inflows. Adds Mohindroo: “We are happy with the tightening of the rules to check the misuse of FTA, especially by ASEAN countries, as an escape route for duty-free imports which circumvent the duty structure.”
Smartphone manufacturers have welcomed the implementation of a scheme for the electronics industry. Nipun Marya, director, brand strategy, Vivo India, says, “The Union Budget's significant focus on local production of mobile phones, electronics and semi-conductor packaging is going to propel the Make in India vision further. We are excited about the detailed scheme.”