The Ministry of Electronics and IT has notified phased manufacturing programme to boost indigenous production of mobile phones by providing tax relief and other incentives on components and accessories used for the devices.
The Phased Manufacturing Programme (PMP) has been notified with the objective of substantially increasing the domestic value addition for establishment of a robust mobile handsets manufacturing eco-system in India.
The programme will enable the mobile handset and related sub-assembly and component industry to plan their investments in the sector.
With the implementation of the programme, the value addition or share of indigenously procured components in manufacturing of feature phones will go up from about 15 to 37 per cent and the same for smartphones will move up from about 10 to 26 per cent.
The phased manufacturing programme was proposed by a joint panel, Fast Track Task Force, of the industry and the government.
The phase-wise programme covers mechanics, die cut parts, microphone and receiver, key pad and USB cable in the current financial year.
It also aims to promote the indigenous manufacturing of populated printed circuit boards, camera modules and connectors in 2018-19, and display assembly, touch panels, vibrator motor and ringer in 2019-20.
The government is also in the process of formulating second phase of the programme, which it expects will enhance value addition to 58.3 per cent in feature phones and 39.6 per cent in smartphones.
PMP-II is currently under preparation by the Fast Track Task Force, set up by MeitY. Fast Track Task Force Chairman is Pankaj Mohindroo.
Due to tax advantages given to local mobile phone manufacturers, 40 new handset units and 30 mobile components and accessory manufacturing units have been set up in the country in the last two years.
These facilities have resulting “in direct employment for over 1 lakh persons. This will give rise to an estimated indirect employment for 2 lakh persons.
Indigenous production of mobile handsets went up from 11 crore units valued at ₹54,000 crore in 2015-16 to 17.5 crore units valued at ₹90,000 crore in 2016-17.
As a result of increase in domestic production of mobile handsets, the share of imported handsets in total domestic demand is gradually coming down.
The import of handsets decreased from ₹56,000 crore in 2015-16 to ₹40,000 crore in 2016-17.