Phones may get expensive by 3-4% after Feb 2: Budget 2021

In order to boost domestic manufacturing, the government, on Monday, announced an increase in custom duty for up to 10 per cent on mobile chargers and some sub-parts of phones, a move that can make handsets costlier by 3-4 per cent from February 2.

Finance Minister Nirmala Sitharaman, during her Union Budget 2021-22 speech, said that withdrawing exemptions on parts of chargers and mobile phones will boost local manufacturing of smartphones.

“Domestic electronic manufacturing has grown rapidly. We are now exporting items like mobiles and chargers,” Sitharaman said.

She further informed, “For greater domestic value addition, we are withdrawing a few exemptions on parts of chargers and sub-parts of mobiles. Further, some parts of mobiles will move from ‘nil’ rate to a moderate 2.5 per cent.”

However, inputs or raw material for manufacture of specified parts like back cover, side keys etc. of cellular mobile phone has been increased from ‘nil’ to 10 per cent.

Inputs or parts of Printed Circuit Board Assembly (PCBA) of charger or adapter of cellular mobile phones are up from ‘nil’ to 10 per cent while the custom duty on inputs or parts of moulded plastic of charger or adapter of cellular mobile phones has also been increased from ‘nil’ to 10 per cent.

The 2.5 per cent duty hike is applicable on inputs or parts for manufacture of PCBA of cellular mobile phones, inputs or parts for manufacture of camera module, manufacture of connectors and raw material, etc.

The new custom duty slabs for chargers and parts of mobile phones are applicable from February 2.

The Centre has already rolled out a production linked incentive (PLI) scheme for the electronics manufacturing sector, particularly for mobile phone manufacturing, to curb increasing imports.