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Date: 01-03-13

5% Import duty on mobile phone in budget 2013; advantage Nokia

Finance Minister P. Chidambaram has announced in budget 2013, a levy of 5% duty on imported mobile phones selling at a price of Rs 2000 or more. The result is locally manufactured phones to cost less than imported phones. So the Mobile Phone OEMs who have manufacturing facility in India will have advantage over others in serving the Indian market. Nokia who started cell phone manufacturing facility in Chennai in 2006 will benefit a lot from this policy. Nokia's Chennai plant may soon touch 1 Billion count of phones manufactured in India. It has the production potential to serve the market demand of phones in India.

No other phone makers including Samsung, Micromax have such advantage to serve the Indian market because they still not have well established and capable production facilities in India.

This is good news for local electronics manufacturing companies who are interested in serving the component and subsystems needs of phone OEMs. Budget 2013 direction is in line with the Government long-term vision of promoting local electronics manufacturing in India.

India's mobile phone unit requirement is estimated around 250 million phones per year. Much of this demand can be met by local manufacturing companies provided Government continue to support electronics industry with necessary infrastructure, which at present now facing bottlenecks.

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