Budget 2020: New Electronics Manufacturing Scheme Proposed, Boost For Smartphone Manufacturers


India's finance budget for 2020 has been announced. The finance minister Nirmala Sitharaman has announced a scheme to encourage the manufacturing of smartphones, semiconductor packaging, and electronic equipment in India. The budget has specifically announced that there is a cost advantage for electronics manufacturing in India.

Budget 2020: Boost For Smartphone Manufacturers


Budget 2020

At the same time, it needs more investment. "I propose a scheme to encourage the manufacturing of mobile phones, semiconductor packaging, and electronic equipment," the minister announced. This can further be extended for manufacturing medical devices as well. The detailed scheme will be released soon, she said.

The budget talked about a modified special incentive package scheme (MSIPS) to boost the over 20 component manufacturing ecosystem in India. This will go beyond making phones and could include waive-offs on the import duty currently levied on components like smartphones and television displays.

The newly announced scheme will likely boost the production of electronic equipment and semiconductors, crucial and integral components for assembling consumer-driven gadgets like smartphones, tablets, televisions, and more. Already companies like Samsung, Oppo, Xiaomi, and a few others are producing the smartphones locally, as opposed to merely assembled devices.

As the budget is giving a push for local manufacturing, other players could follow suit to surpass the heavy taxes imposed on imported electronic gadgets. Moreover, the idea is to create employment in the country with local manufacturing, which is a central focus for the government. Additionally, the budget is boosting R&D and a technological boost in the country.

The budget 2020 could also bring in Apple manufacturing units in the country. If Apple begins to manufacture the iPhone in the country, like the iPhone XR, the price will certainly drop. The price drop extends to other smartphone and gadget manufacturers, which in turn, could boost consumer-buying in the country.


The budget is also giving quantum computing a big push. The minister said that India will allocate Rs 8000 crore in the next five years in areas related to quantum computing research. Quantum computing is still a researchable topic for now and there are no commercial applications yet. The boost for technology will likely impact market growth and consumer expenditure.

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