Union Budget 2024: Union Finance Minister Nirmala Sitharaman presented the Union Budget in Parliament on Tuesday. During her budget speech, she announced a reduction of 15 percent in the Basic Customs Duty (BCD) on smartphones and chargers. Additionally, the BCD on mobile Printed Circuit Board Assemblies (PCBA) will also be decreased by 15 percent.
Sitharaman said, “With a threefold increase in domestic production and almost a 100-fold jump in exports of mobile phones over the last 6 years, the Indian mobile industry has matured. In the interest of consumers I now propose to reduce the Basic Customs Duty (BCD) on mobile phones, mobile
Printed Circuit Board Assembly (PCBA) and mobile charger to 15 per cent.” The reduction in BCD is expected to make mobile phones and related accessories more affordable for consumers.
By decreasing the imported components cost, the government aims to pass the benefit to the people, potentially leading to reduced retail prices.
With the proposed action, we can anticipate a surge in enthusiasm and accessibility of mobile technology across diverse populations. The slash in Basic Customs Duty (BCD) should engender a stimulating edge and foster further investments within our local mobile phone sector. Businesses stand a chance to benefit from lowered costs for vital parts. This can pave the way for improved production efficacy and a potential hike in profits.
According to the Worldwide Quarterly Mobile Phone Tracker by International Data Corporation, India’s smartphone market shipped 34 million units in the first quarter of 2024.
This represented a year-over-year growth of 11.5 per cent, marking the third consecutive quarter of increased shipments.
Earlier, to bolster the Indian start-up eco-system, boost the entrepreneurial spirit and support innovation, Finance Minister Nirmala Sitharaman proposed to abolish the so-called angel tax for all classes of investors.
This was a proposal from the industry for a long time, and this announcement will drive more investments towards startups in particular. Startups function as engines of economic growth, playing a crucial role in generating new jobs, ideas, products, and services.
Import Duty On Motherboard Increased
The central government is likely to increase import duty on motherboards by 5 percent to boost domestic telecom gear manufacturing.
“To incentivise domestic manufacturing, I propose to increase the BCD (Basic Customs Duty) from 10 to 15 per cent on PCBA (printed circuit board assembly) of specified telecom equipment,” Finance Minister Nirmala Sitharaman said.
The increase in fundamental customs duty related to telecom PCB production is offset by a duty-free provision for essential minerals vital in the manufacturing of communication equipment.
The Finance Minister also proposed full duty exemptions on 25 pivotal minerals such as lithium, copper, cobalt, and rare earth elements. These minerals bear significant importance in various industries including nuclear energy, renewables, space, defense, telecommunications, and high-tech electronics. Also, there’s a scheme on the table to drive down customs duty on two of these minerals.
(With Agency Inputs)