The Indian government has imposed a 10% import duty on mobile phone components to include Printed Circuit Boards (PCB’s), Camera Modules and Connectors, in a bid to further bring in the entire mobile ecosystem, under the ambit of local manufacturing. Our recent report on handset manufacturing available here, from the Emerging Device Strategy (EDS) Services noted the increase of local production share in India, aided by government support and tax incentives.

Earlier in the year the country witnessed a similar move with the government introducing a 20% basic customs duty on import of full mobile phones, as well as duties of between 5% and 20% on components including LCD panels, PCBs for chargers, lithium batteries and other components including keypads, battery packs and antennae.

The Indian Government is now setting the stage for next phase of local production, by pushing for phased manufacturing program to include component manufacturing and aims bring the entire ecosystem to the country. We however expect the move to adversely impact the bottom line of most vendors and especially the local ones in the short term. The Indian local vendors in the recent times have already been hit hard by the Chinese competition.