Significant Reduction in Basic Customs Duty
New Delhi, July 23: In a move set to benefit consumers and the domestic mobile industry, Finance Minister Nirmala Sitharaman has announced a reduction of the Basic Customs Duty (BCD) on mobile phones to 15% in the Union Budget for the fiscal year 2024-25. This significant cut was revealed during her presentation in Parliament on Tuesday, highlighting the government’s commitment to making mobile technology more accessible and affordable.
Inclusion of Mobile PCBA and Chargers
In addition to mobile phones, the BCD on mobile Printed Circuit Board Assembly (PCBA) and mobile chargers will also be reduced to 15%. This comprehensive reduction aims to lower the overall cost of mobile devices and their essential accessories.
Benefits for Consumers and Industry
The reduction in BCD is expected to lead to more affordable prices for mobile phones and related accessories. By lowering the cost of imported components and finished products, the government aims to pass on the benefits to end-users, potentially resulting in reduced retail prices. This move is anticipated to stimulate demand and make mobile technology more accessible across different population segments.
For the domestic mobile phone industry, the reduced BCD is likely to enhance competitiveness and encourage further investments. Manufacturers can benefit from lower import costs for essential components, thereby improving their production efficiency and profit margins.
Also Read: Union Budget 2024: Reduced Customs Duty on Gold, Silver, and Platinum
Boosting Domestic Production and Exports
Sitharaman noted the significant growth in the Indian mobile industry, with domestic production tripling and exports increasing almost 100-fold over the last six years. The reduced BCD aims to further this growth, benefiting both consumers and manufacturers.
Market Impact and Future Prospects
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, marking an 11.5% year-over-year growth. The reduction in BCD is expected to continue this positive trend, driving increased shipments and market growth.
Additional Budget Announcements
The finance minister also proposed abolishing the angel tax for all classes of investors, a long-standing demand from the industry. This move aims to bolster the Indian start-up ecosystem, boost entrepreneurial spirit, and support innovation. By driving more investments towards startups, the government hopes to generate new jobs, ideas, products, and services, further contributing to economic growth.
In summary, the Budget 2024 introduces significant reforms aimed at making mobile phones cheaper and boosting the domestic mobile industry. With reduced basic customs duty and supportive measures for startups, the government is set to enhance accessibility, competitiveness, and innovation across the sector.
