With an objective of promoting depth in the domestic manufacturing of cellular mobile handsets, the ministry of Electronics and IT has recently announced a Phased Manufacturing Programme.
According to an official statement, the Phased Manufacturing Programme (PMP) has been notified with the objective of substantially increasing the domestic value addition for the establishment of a robust Cellular mobile handsets manufacturing eco-system in India.
That is, to promote differential excise duty dispensation in the Budget 2015-16 like Countervailing Duty (CVD) on imports of mobile handsets at 12.5 percent and Excise Duty at 1 percent without input tax credit gave an impetus to the assembly, programming, testing and packaging (APTP) model of manufacturing Cellular mobile handsets.
With the implementation of PMP, the value addition or share of indigenously procured components in the manufacturing of feature phones will go up from about 15 to 37 percent and the same for smartphones will move up from about 10 to 26 percent.
"It is our roadmap to ensure an increase in the domestic value addition in a manufacturing of mobile handsets. It will give a huge impetus to local mobile manufacturing and will help us meet a significant portion of the global handset requirement over a period of time," Aruna Sundararajan, Secretary, MeitY said.
She said that it will also create an ecosystem, where due to the growth in local manufacturing, phones will become cheaper and "will be accessible to millions of Indians, in turn, give a huge boost to the digital payments initiative."
According to the statement, the program will be rolled out over a period of time and it will focus to ensure that appropriate fiscal and financial incentives, indigenous manufacturing of cellular mobile handsets and various sub-assemblies, which go into the manufacturing of handsets, can be promoted over a period of time.
The phase-wise program covers mechanics, die cut parts, microphone and receiver, keypad and USB cable in the current financial year.
"The PMP shall also be extended to parts, sub-parts, inputs for aforesaid sub-assemblies as the manufacturing ecosystem evolves over the next few years," the statement further added.