Duty-free handsets made in special economic zones could kill local units: Handset vendors

[Dubious]

By
Anandita Singh Mankotia

, ET Bureau|

Updated: Dec 16, 2018, 11.30 PM IST

Samsung and Wistron were among those that had received approvals for investments under PMP.

“These companies have already received the requisite approvals for their investments in the country under the PMP and the government must keep this is mind,” Mohindroo told ET.

US electronics manufacturer Flex, which is in negotiations with mobile services provider Reliance Jio Infocomm, is seeking tax benefits to produce handsets in its SEZ unit near Chennai and sell them in the domestic market without attracting duties, at rates similar to those in free-trade agreements (FTA), ET reported in its edition dated December 15.

The industry association, which includes members such as Apple, Xiaomi, Oppo, Vivo, Micromax and Lava, contended that such a move could damage the nascent mobile handset and component manufacturing industry because it would negate incentives for local production that were given by increasing import duties on key components and completely built handsets.

Any further relaxation in supplies from SEZs to the domestic market can result in an “immediate existential crisis” for the local industry, Mohindroo said.

SEZs were set up to encourage foreign investment and promote exports from India. SEZ units may sell goods and services in the domestic market in accordance with the import policy and on payment of applicable duties.

“The FTA and SEZ are two different systems with different objectives and should not be mixed together,” the industry association said.

Under PMP, the government had identified 12 components used in mobile phones to be assembled locally in phases until 2019-20. It aims to promote indigenous manufacturing of populated printed circuit boards, camera modules and connectors in the current financial year and display assembly, touch panels, vibrator motors and ringers in 2019-20. The programme will be extended as the manufacturing ecosystem evolves over the next few years.

PMP has been at the heart of spurring local manufacturing under the government’s Make in India programme.

Handset companies say more steps are needed to make India a hub of smartphone manufacturing to take on Vietnam and Taiwan.

https://economictimes.indiatimes.co...nits-handset-vendors/articleshow/67119100.cms

 

[LASER1]

More Assembly plants are not required, it's already raising our import costs. These members in IA are importing components and assembling them, at the expense of our import. Let them make any JV's for manufacturing of components.

SEZ unit near Chennai and sell them in the domestic market without attracting duties, at rates similar to those in free-trade agreements (FTA)

Most welcome. Let there be more incentives for local manufacturing.

 

[proud_indian]

Let them make any JV's for manufacturing of components.
Most welcome. Let there be more incentives for local manufacturing.

It has already started happening
just copying my old post


in the next phase(which is the first quarter next year)many of the components you were asking will be manufactured here which will result in an increase of more value addition

Syska partners Suyin, Biometronic to start India's first mobile camera module factory; to invest Rs 200 crore

Syska Group has inked a strategic partnership with Taiwanese component manufacturer Suyin Optronics and Singapore's Biometronic to start India’s first camera module factory at an investment of Rs 200 crore. The investment will be made in a phased manner.


China's Holitech Group today said it will set up a production facility in Tirupati, Andhra Pradesh, with an investment of Rs 1,400 crore (USD 200 million) to supply mobile phone components like camera modules and touch panels to smartphone major Xiaomi.

Spread over 75 acre, the facility is expected to be operational in the first quarter of 2019, providing employment to about 6,000 people at full-scale in the next three years.


"We will set up the plant in two phases with phase I starting in January where we will invest USD 100 million and phase II, an additional USD 100 million. The facility will cater exclusively to Xiaomi," Holitech Technology CEO Guisheng Chen told reporters here.

He added that the facility will have an annual capacity of 50 million component sets at the end of phase I and ramp it up to 100 million within three years' time.

The components that will be made at the Tirupati facility include camera modules, TFT (thin film transistor), flexible printed circuit, touch panels and fingerprint modules.

In April, Xiaomi had hosted a global meet in Delhi that saw participation from 50 of its global suppliers. The company, at that time, had said these suppliers setting up manufacturing base inIndia would bring in Rs 15,000 crore in investment and create 50,000 jobs.

"We are committed to Make in India and our intent is to get our partners to also manufacture locally here. Holitech's plant will cater to significant part of our requirement. We will continue to work on getting more partners to set up base in India," Xiaomi Vice President and IndiaManaging Director Manu Jain said.

He added that local manufacturing of components could bring down prices of mobile phones.

Holitech, which supplies to other global handset makers also, has 16 factories in China andTaiwan and employs about 30,000 people. The company expects to clock USD 4 billion in revenue this year.

"The facility in India is our first international foray. We expect to see revenue of USD 2 billion from here after phase II," Chen said.

Andhra Pradesh IT Minister Nara Lokesh said the state presents an attractive opportunity for companies looking at setting up manufacturing base.

"Our state of the art infrastructural offerings make Andhra Pradesh an exciting investment opportunity and it is heartening to see Holitech Technology come to the state and initiate a big revolution in the market for local manufacturing," he added.