Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

ICEA calls for reduction in Import Duties to Boost Mobile Phone Sector

Prelims Only | Economics | Mains Paper 3: Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth
Note4Students

From UPSC perspective, the following things are important :

Prelims level: ICEA and its mandate

Why in the News?

  • The Indian Cellular & Electronics Association (ICEA), representing domestic electronics manufacturers, called for a reduction of import duties in the upcoming Union budget.
    • ICEA highlighted that the growth of the mobile phone sector now depends on demand in the global market rather than domestic demand, facilitated by supportive policies like the Production Linked Incentive (PLI) scheme.

About India Cellular and Electronics Association (ICEA) 

  • The ICEA is the apex industry body representing the interests of the mobile and electronics sector in India.
  • It was established in 2017.
  • It plays a crucial role in shaping policies and promoting the growth of the industry through advocacy, policy formulation, and strategic initiatives.
  • Membership:
    • ICEA comprises leading mobile handset manufacturers, electronics companies, and industry stakeholders.
    • This includes both Indian and global companies operating in the electronics sector.
  • Collaborations:
    • ICEA works closely with government bodies, regulatory authorities, and other industry associations to align its initiatives with national economic goals.

ICEA’s Key Demands

  • Reduction of Import Duties: ICEA is calling for a reduction in import duties on manufacturing inputs for electronics, particularly in the mobile phone sector.
    • Current high tariffs are increasing manufacturing costs in India by 7-7.5% on the bill of materials.
  • Alignment with Global Standards: The demand includes aligning tariffs with those of countries like China and Vietnam, which have lower tariffs on fewer components.
  • Improvement of Customs Procedures: ICEA is urging for streamlined customs procedures to prevent delays in the shipment of key components.

Significance of ICEA’s Demands

  • Reducing import duties enhances competitiveness, boosts exports, stimulates investment and job creation, reduces trade deficit, and fosters long-term growth in India’s electronics and mobile phone manufacturing sectors.

Key Initiatives and Programs by ICEA

  • Electronics Manufacturing Clusters: ICEA promotes the development of electronics manufacturing clusters to create a robust supply chain and manufacturing base in India.
  • Skill Development: The association emphasizes the need for skill development in the electronics sector to ensure a skilled workforce capable of supporting industry growth.
  • R&D and Innovation: ICEA encourages research and development (R&D) and innovation within the sector to maintain competitiveness and technological advancement.

Boost in Mobile Phone Exports from India

  • ICEA Report: According to ICEA, mobile phone exports from India have doubled to surpass Rs 90,000 crore (about USD 11.12 billion) in FY 2022-23 from Rs 45,000 crore in FY22.
  • Government Targets: The government has set a target of USD 10 billion worth of mobile phone exports, with an ambitious goal of achieving USD 300 billion worth of electronics manufacturing by 2025-26, of which USD 120 billion is expected from exports.

Major Contributors to Export Growth:

  • Apple’s Contribution: Apple is estimated to have a 50% share of mobile phone exports from India, contributing USD 5.5 billion (about Rs 45,000 crore).
  • Samsung’s Contribution: Samsung accounts for approximately 40% of exports, worth Rs 36,000 crore.
  • Third-Party Exports: Third-party exports contributed around USD 1.1 billion to the total export, comprising phones of various brands made in India.

Future Projections:

  • Export Contribution: Mobile phones are anticipated to contribute more than USD 50 billion worth of exports by 2025-26.
  • Overall Contribution: Mobile phone exports now account for 46% of the overall electronic goods exports, according to ICEA.

 

PYQ:

[2016] Recently, India’s first ‘National Investment and Manufacturing Zone’ was proposed to be set up in:

(a) Andhra Pradesh

(b) Gujarat

(c) Maharashtra

(d) Uttar Pradesh

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