“We were expecting the Financial Budget 2017 to offer incentives to start inflow towards design led manufacturing in place of assembly led manufacturing ecosystem. However, it seems like the government is not yet convinced towards adopting multiple layered incentives for localization, while increasing the duties on CBU (Completely built Units). Overall based on the information available from the budget the impact of the policies seem to be neutral for mobile/tablet industry, at best.
There has been a 2% increase in duties levied on import of PCBA in India, which will still reflect only on one part of the manufacturing cycle with focus on assembly of mobile handsets. On the other hand, providing attractive incentives for localization of design and R&D capabilities would have bolstered the ‘Make in India’ initiative, and driven more handset makers to introduce design led manufacturing in India.
Post demonetization government seems to be totally convinced towards digital payment adoption. There is one key development towards ‘Digital India’ program, where Government has decided to waive off all duties (SAD/CVD, BCD) levied on mPOS systems. This in turn will make the POS devices cheaper, leading to greater adoption of such devices even at the grass root level in the coming years and hence helping drive forward the mobile payments ecosystem. Considering the adoption of Aadhar based payment, government has also waived off duties from components such as IRIS scanner and fingerprint readers.”
