Phased manufacturing programme for wearables 'will help Make in India'


SOURCE: LIVEMINT.COM
FEB 02, 2022

NEW DELHI : To promote domestic manufacturing of wearables and hearable devices, the government on Tuesday announced a new phased manufacturing programme (PMP).

Finance minister Nirmala Sitharaman said the duty on most components for manufacturing wearables and hearable devices will be brought down to nil from 1 April while customs duty on imports of such products will be charged at 15-20% over FY23-26.

While duty on imported smartwatches, bluetooth speakers, true wireless stereos, headphones, earphones, earbuds, neckbands and headsets will be at 20%, duty on import of components will be at 0-15% between FY23 and FY26.

“Customs duty rates are being calibrated to provide a graded rate structure to facilitate domestic manufacturing of wearable devices, hearable devices and electronic smart metres," Sitharaman said in her budget speech.

Mint had reported about the possible changes in the taxation of electronics components, especially in hearables and wearables, which have seen a spurt in demand in FY20-21, with domestic companies cornering the market. “The budget reinforces the mantra of Atmanirbhar Bharat and Make in India, especially in the fast growing electronics sector by rationalizing the customs duty rates, to provide a graded rate structure till 2025-26, for facilitating domestic production of wearable and hearable devices and electronic smart metres," said Bipin Sapra, partner, EY.

“PMP which is being rolled out is welcome. It has also rationalized the inverted duty structure, which was throttling the development of manufacturing in the sector," said Pankaj Mohindroo, chairman of Indian Cellular and Electronics Association (ICEA). PMP should be immediately followed up with a robust PLI scheme to make India a global powerhouse in this segment, he added.

Customs duty on camera lens for manufacturing camera modules was lowered from 15% to 2.5%, and duty on parts for manufacturing transformer of mobile chargers, such as copper wire-enamelled, insulation tape, ferrite core, triple insulated winding wire, and varnish, was reduced from 10-15% to 5%. Gold and aluminium used in printed circuit boards will attract zero duty, compared with 2.5% earlier.

“Duty concessions to promote electronics manufacturing, such as wearables, hearables, mobile phones parts, including camera modules, etc., is a significant step towards an Atmanirbhar Bharat and will help promote electronics manufacturing," said Josh Foulger, managing director, Bharat FIH Ltd, a participant for the mobile manufacturing PLI scheme.

Sitharaman said the changes will enable high growth in domestic manufacturing of electronic items.

The finance minister also announced a one-year extension to the customs duty exemption given to steel scrap last year, in an effort to provide relief to MSME secondary steel producers.

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