In his last full budget before general elections in 2019, Finance Minister Arun Jaitley reduced corporate tax for 99 percent of the companies to 25 percent. In keeping with his earlier announcement of reducing corporate taxation rate to 25 per cent, the finance minister made the change for companies with turnover of upto Rs 250 crore, up from Rs 50 crore announced during his last year budget speech. He said this would take care of almost 99 per cent of the companies and would have an impact of Rs 7,000 crore on government finances. Only about 250 companies would have a turnover above the cut-off level. An ID on lines of Aadhaar would also be set up for companies.
Jaitley also proposed to increase customs duty on mobile phones from 15 per cent to 20 per cent, on some of their parts and accessories to 15 per cent and on certain parts of TVs to 15 per cent. “This measure will promote creation of more jobs in the country,” he said.
Industry leaders share their views on Union Budget 2018
P Sanjeev, Vice President Sales Huawei India, Consumer Business Group.
“Huawei Honor is with the law of the land and in line with the government’s vision of furthering local manufacturing. With our India first strategy, our aim is to build local capacity for indigenous production in India to meet the growing demand for the our smartphones in the market in the long run. Earlier this week, we have begun production of our latest bestseller the Honor 7x and will continue to add to our production portfolio.”
Mr. Vikas Agarwal, General Manager at OnePlus India
“Since the announcement of Make in India program 3 years back, over 85% of smartphones sold in country are now produced locally. So, this is opportune time to introduce next set of regulations to attract investment in the manufacturing sector and establish India as a global hub for electronics. At OnePlus, we are fully committed to the Indian market and welcome the proposed regulations. Currently, all OnePlus smartphones are produced locally and we are already exploring ways to further increase the share of local manufacturing to ensure there is minimal cost impact of any new regulations to the end customer.”
Mr. Sanjay Kumar Kalirona, CEO & Director, COMIO
“The Union Budget-2018 is a positive step towards India’s growing smartphone market. The increased custom duty on mobiles will further boost local manufacturing and will be the essential push to create a manufacturing eco-system in India. Smartphones play a crucial role in today’s times and this budget is an extension to the ‘Digital India’ initiative. With focus on development, it is a progressive budget and is a stepping stone to India’s growth story.”
Mr. Manish Sharma, President and CEO, Panasonic India & South-Asia; President, CEAMA.
“ACE industry welcomes the Budget, particularly the push for local manufacturing of Mobile Phones and Consumer Electronics by increasing Customs Duty on imported products and components, a move that is consistent with the government’s Make-in-India initiative. The focus on improving rural electrification and well-being through the National Livelihood Mission will stimulate rural demand for electronics and appliances in the short to medium term meanwhile, a sustained development can be ensured through the focus on Smart Cities. The MSME sector, which forms the backbone of the electronics industry will benefit from reduction in corporate tax from 30% to 25% and the allocation of ~Rs 3,800 crore for the development of the sector will translate to strengthening the electronics eco-system at large. Further, doubling of allocation towards future technologies such as IoT, Robotics, etc. are encouraging as these rapidly growing technologies are likely to impact our industry as well.”
Mr Syed Tajuddin, CEO, Coolpad India.
“This budget is pretty regular with a mix bag of things, nothing path breaking or outstanding to boost the manufacturing sector. For agricultural and rural economy there is some really positive news, but not great hints for the Consumer durable and mobile handset industry. The increase in custom duty from 15% to 20% will definitely hamper the cost to customer, especially when it comes to getting repairs for the high-end devices. While increase in custom duty on handsets will compel brands to manufacture or assemble more in India, still there is not great support for local ecosystem for manufacturing spare parts. And this lack of local spare part manufacturers will mean a tough situation for mobile handset brands. Hence a brand is compelled to import most of the spare parts and customers have to bear some burden of it.”
Mr. Sudhin Mathur, Managing Director, Motorola Mobility India
“The current move will provide stimulus to the government’s ‘Make in India’ initiative and further enhance the manufacturing sector leading to job creation. Our journey of Make in India began three years ago and we have been manufacturing and assembling at our manufacturing unit through our global contract manufacturing partner Flextronics. We have doubled up our production capacity this financial year and will continue to scale up our manufacturing capacities to meet the growing customer demand”
Mr. Sachin Batra, National Head of Marketing and Sales, ZTE Corporation.
“With the increase in basic custom duty from 15 to 20 percent, the government has shown the encouragement to major smartphone players in setting up their manufacturing units in India. This step apart from supporting the Make in India movement, will also create job opportunities. The emergence of artificial intelligence will prepare the country for future and novel technologies. Providing optical fibre connectivity through Bharat Net Program to 2.5 Lakh villagers is a commendable addition to this year’s budget that will indeed make life easier for Indians”
Ajey Mehta, Vice President India, HMD Global.
“HMD Global continues its strong emphasis on PM Modi’s Make in India campaign. While the import duties for mobile phones increased to 20%, along with a 15% duty on key components, this will have a minimum impact on our business, as all of our current portfolio of Nokia phones are manufactured in India.” said Ajey Mehta, Vice President India, HMD Global
Mr.Amit Gujral , Chief Marketing Officer, LG Electronics,India
“The Budget undoubtedly is a ‘people’s budget’, favouring the rural populace, which is the backbone of the Indian economy. Government’s focus on transforming India into a Digital power with its roots in promoting innovation ecosystems, smart technology, robotics , IoT and artificial intelligence is commendable. It is good to see that there has been a significant push to boost the ‘Make in India’ initiative. Our heartiest congratulations to the Government for focusing on healthcare, infrastructural development and further investing in Swacchh Bharat Mission.”
Mr. Rajesh Aggarwal, Co-Founder Micromax
This year’s Budget has brought significant changes, focusing on various key aspects which are largely stressed upon our overall economic growth – Rural, Agriculture, Ease of doing business, skilled based education, job creation, healthcare, housing, Structural reforms and infrastructure development which will help stimulate and strengthen the Indian economy
The emphasis is on establishing a programme to bring in direct efforts towards building a holistic ecosystem for Artificial intelligence. The focus on AI is a welcome move towards technological advancements in India and an allocation of INR 3073 crore for the Digital India scheme will certainly propel digital adoption and smartphone adoption in the country.
The increase in customs duty on Mobiles will encourage local manufacturing. As India is becoming the global hub for manufacturing, the measures taken by the government will surely grow confidence amongst the manufacturers and I strongly believe that this will further create business and human resource opportunities as well. Also, with the government’s move to invest in over 5 lakh WIFI Hotspots, will enable rural India to have Broadband access which in turn will be a significant stepping stone in the Digital India movement.
The government’s measures towards the import duty on printed circuit boards (PCBs), camera modules, connectors and other components that go into making smartphones, will boost the Make in India initiative and will relentlessly pursue in curbing imports and building value addition in the country. Micromax is deeply connected on the Make in India initiative with 3 running factories and we support this.
However, the increase in customs duty on the certain parts of TV might affect the manufacturing ecosystem adversely. We need the government to help in creating an improved local manufacturing and a better component ecosystem for the consumer electronics manufacturers as well. With focus on growth, it is the budget to look forward that would add an impetus to the India’s growth story.
Mr. Sanjeev Agarwal, Chief Manufacturing Officer, LAVA International.
“We welcome the announcement on custom duty increase in mobile phones from 15pc to 20 pc in the Union Budget 2018-19. This will provide a big boost to the Make-in-India campaign by the government, and will be instrumental in achieving our country’s vision of making India a global hub for mobile phone manufacturing. Local manufacturing will create more job opportunities, benefitting the youth and contributing towards the overall growth of the economy. I congratulate the government on this landmark decision.”
Mr Rajeev Jain, Chief Financial Officer, Intex Technologies
“The Budget is focused towards increasing the personal disposable income in rural India and critical areas like education, health and infrastructure. This will further enhance the Make in India initiative of the Government in critical electronic industry particularly mobile, which is the key product of all the Government’s initiatives.
The Budget will spur the demand side of the economy by proposing various rural income enhancement schemes and reducing various pain areas of farmers. This will in turn rejuvenate the overall economic growth and spur demand for consumer electronics items like mobile phones and LED TVs thereby fuelling domestic businesses.
Intex has been known to cater to the developing Tier 2 and 3 cities since inception with its affordable consumer products and with the various rural personal disposable income enhancement schemes introduced in the budget, it will give a fillip to the sale and demand of electronic products.
The budget has further strengthened the Digital India initiative with the boost in increasing allocation for digital education through classrooms and continue with the further broadband penetration in the country.
I welcome government’s move to walk the talk on “Make in India” by increasing customs duty (to 20%) on the imported mobile phones and in PCBAs of accessories like batteries & chargers (15%), which will prove to be the big boost for localisation and setting up of a domestic component ecosystem. This is a big thumbs up to domestic players like Intex, which have been developing domestic capacities since long in electronics manufacturing.
The Budget has also increased duty on certain LED TV components such as LED panels (15%), which will push for developing capacities for local manufacturing of components. Such move encourage Intex that has been working on enhancing domestic capacities and has recently began its own Open Cell Manufacturing or LED Panel manufacturing to improve quality control and produce affordable quality products. It will encourage localisation in India with domestic manufacturers now implementing plans for local production capacity.
Overall, the budget is development oriented fulfilling the ease of doing business and ease of living for citizens.”
Mr. Mahesh Lingareddy, Founder & Chairman of Smartron.
“Union Budget 2018 has given clear indications of a continued focus on the growth of new businesses in India. The announcement of increase in basic customs duty on mobile phones to 20% is a concrete step towards fostering local manufacturing in India which would further fuel indigenous innovation. This will allow us to build an innovation engine pipeline of several global brands in the country. As India’s first global OEM and IOT brand with a vision of putting India on the global innovation map, the Union Budget would prove to be the necessary catalyst for our continued growth towards becoming a multi-billion dollar company globally.
India needs an investment (VC) ecosystem that can pump in US$15-US$20 billion every year to support and sustain a 5000+ startup ecosystem. Union Budget 2018 has taken the needs of the ecosystem into consideration by taking policy decisions to build a robust alternative investment regime in the country along-with a taxation model designed for the special nature of VC funds and angel investors. These policies and new taxation model would definitely help the start-ups to ensure survival and profitability over the years. As India’s first global OEM and IoT brand, Smartron believes in collective innovation and this year’s Union Budget would help us in our long term vision of bringing in the start-ups together on a single platform to innovate at the global level.”
Mr. Ashwin Bhandari, CEO iVOOMi India
It’s a welcome initiative towards make in india, in last 2 years ecosystem in India has already taken first level growth and situation has improved a lot. All the required resources for making the phones in India are stable, hence this will fuel industry growth, boom localisation to next level.
We at iVooMi will be changing over to 100% (currently is above 95%) make in India with this initiative and start the development of localisation for PCBA SMT, Battery complete unit, Transducers making in India to drive the growth to next level, “Targeting 2020 as Completely designed and Manufactured Phone In India”.
Further incentivising the higher level manufacturing (Surface Mount Technology, Injection Moulding, Optical Electronics) is recommended to expedite the design and development within Indian ecosystem.