Duty on mobile parts lowered

The finance ministry on Thursday rationalised the duty structure on mobile handset components. The duty on chargers, adaptors, batteries and wired headsets has been brought down to 12.5 per cent from 29.44 per cent.

Speakers, headphones, batteries, adaptors and chargers on which the duties have been changed constitute 20 per cent of the cost of a feature phone and less than 10 per cent of the cost of a smartphone. The new duty structure could bring down prices of feature phones by up to 10 per cent and smartphones by up to 3 per cent.

Hari Om Rai, chairman and managing director of Lava International, said the revision would remove hurdles for handset manufacturers. "The road is now clear for manufacture of both smartphones and relatively low-value feature phones," he said.

"The quick correction of course by the government after the Budget will create the ecosystem for mass manufacturing of both mobile phones and parts in a balanced way," said Josh Foulger, country head and managing director, Foxconn International Holding India.

The special additional duty of 2 per cent on populated printed circuit boards for manufacture of mobile phones has been withdrawn. The exemption of basic Customs duty, countervailing duty and special additional duty has been restored.

Pankaj Mohindroo, national president of the Indian Cellular Association, said the duty structure in place till Thursday made the total duty on components higher than on mobile handsets. Now the total duty on handsets and components was on a par, industry executives said.