Investors cheer budget boost for electronics

Need to fix Component Woes:

•  Customs duty cuts and exemptions in budget to aid electronics sector
•  Govt extends import duty exemptions for electronics inputs
•  ELCINA urges for robust scheme to promote component manufacturing

Vijayawada: With the booster dose provided in the Union Budget for the electronic industries, many investors feel that it will stimulate growth for greenfield and brownfield units across India.

At the same time, the stakeholders feel that components and key modules used in electronic equipment have been a major stumbling block for the development of a sustainable ESDM (electronics system design and manufacturing) sector in India.

Electronics Industries Association of India (ELCINA) feels that till such time that this shortcoming is not addressed, they will always be dependent on overseas suppliers and will struggle to take a leadership position in the global industry.

ELCINA, while acknowledging the positive steps announced in the Union Budget 2024-25 presented by Finance Minister Nirmala Sitharaman, which included essential measures impacting the electronics sector, said it brings significant changes in customs duties and extends exemptions that will support value-added manufacturing within the industry.

The FM announced reduction in Basic Customs Duty (BCD) on cellular mobile phones, chargers/adapters and Printed Circuit Board Assemblies (PCBAs) from 20 per cent to 15 per cent, BCD on Oxygen Free Copper (OFC) strips used in resistor manufacturing has to zero, subject to Import of Goods at Concessional Rate of Duty (IGCR) conditions. BCD on PCBAs for specified telecom equipment has been increased from 10 per cent to 15 per cent and exemption entries for input items/raw materials for manufacturing connectors have been expanded to include additional items.

The government will issue notifications providing exemptions on import duties for inputs and capital goods extension from one year to five years, aligning with the industry’s recommendations.

In his reaction to the budget, Rajoo Goel, Secretary General, ELCINA, appreciated the proposals noting its positive changes for the electronics sector. “We believe the slew of measures support and continue the initiatives taken in the last few years to promote value added manufacturing. However, ELCINA and the industry at large are awaiting the announcement of a robust scheme for promotion of electronic components, parts and modules manufacturing.”

A detailed representation for the same with analysis of the segment-wise current demand and supply scenario has been presented to the Ministry of Electronics and Information Technology (MeitY). “We urge the government to take an urgent decision and provide much needed support to this value added manufacturing segment of the ESDM industry,” Rajoo said.