New Delhi: Indian handset market recorded over 350 million shipments in 2017 as compared to 280 million in 2016, a surge in revenue from Rs 111,000 crore in 2015 to Rs 135,000 crore in 2016.
According to an ASSOCHAM-KPMG joint study, smart phones have also gained immense popularity in India in the last four years and constituted 43 per cent of the total handset shipments in 2016.
Robust growths of the handset market coupled with enhanced connectivity of telecom services have been pivotal in growth of various industries such as retail, manufacturing, IT, e-commerce, etc, noted the ASSOCHAM-KPMG study titled “Accelerating growth and ease of doing businesses.”
Indian handset exports flourished from 2008 to 2012 going up to Rs 12,000 crore but were interrupted by a decline of almost 30 per cent in two subsequent years.
Accompanied by a parallel fall in handset manufacturing, downfall of handset manufacturing industry became a major area of concern for the government, noted the study.
In order to revive the industry, it is imperative to boost handset manufacturing in India.
The FTTF, set up in 2014, has a target of increasing count of handsets manufactured in India to 500 million and handset exports to 120 million by 2020.
Further, ‘Make in India’, ‘Skill India’, and other initiatives taken by the government played a pivotal role to achieve an 85 per cent growth in handset manufacturing recorded in 2015-16 (Rs 54,000 crores) over the previous year, which in 2016-17 grew to Rs 90,000 crore.
Currently, the only export incentive available to handset manufacturers is two per cent incentive under the Merchandise Exports from India Scheme (MEIS) introduced in the Foreign Trade Policy 2015-20.
The industry is of the view that the government may increase the MEIS incentive and introduce new incentives such as freight equalization subsidy and to enhance duty draw back to 3 per cent to attract more players in the market and to encourage the existing players to ramp up manufacturing which would also create more jobs in India.
Secondly, zero import duty is applicable on few capital goods such as SMT lines used for manufacture of handsets.
However, various other capital goods used for manufacture of handsets and components are still not covered under zero import duty regime.