Union Finance Minister Nirmala Sitharaman today presented the Budget 2020 in the Parliament. Among the announcements made for the technology sector in the country, she proposed a new scheme to promote the manufacturing of mobile phones, electronics, and semiconductor packaging in India.

The Finance Minister emphasized on the job creation potential in the tech industry. She said that the new policy will aim to make India a part of the global manufacturing chain as well as further boost the employment opportunity in the segment

"The electronics manufacturing industry is very competitive and the potential in job creation is immense. India needs to boost domestic manufacturing and attract large investments in the electronics value chain," Sitharaman said.

The announcement comes as an extension of the central government's 'Make in India' programme, which according to Sitharaman, will encompass major disruptions in the country's tech domain.

Nirmala Sitharaman
Finance Minister Nirmala Sitharaman will present her second full-year annual budget to parliament at 11 am.Reuters

A detailed scheme with details will be released soon but we can expect more waive-offs on the import duty that is currently being levied on smartphones and television displays. During the speech, Sitharaman said that customs duty rates were pre-announced for items like mobile phones, electric vehicles and their components under Make in India initiative, which ensured gradual increase in domestic value addition capacity in India.

"Customs duty rates are being revised on electric vehicles, and parts of mobiles as part of such carefully conceived Phased Manufacturing Plans," she said.

Domestic production of smartphones

The scheme also aims to boost the production of electronic equipment and semiconductors that are essential for the assembly of consumer-end devices like mobile phones, tablets, televisions, and more.

Make in India
'Make in India' a focus for Budget 2020Reuters

At the moment, mobile phone manufacturers like Samsung, Oppo, and Xiaomi are producing their smartphones locally in the country, which used to be limited to mere assembly earlier. Other players have also started to follow the same route to escape heavy taxes imposed on imported electronic items.

The greater the number of local manufacturing units in the country will mean greater employment opportunities. The government wants OEMs to employ domestic manufacturing of mobile phones and also venture into R&D within the country.

To recall, the Indian government, under the National Policy on Electronics 2019, had set a target of making 100 crore mobile handsets indigenously by 2025, valued at about Rs 13 lakh crore, which also had a target to promote domestic manufacturing in the entire value-chain of ESDM (electronic system design and manufacturing) to achieve a turnover of $400 billion or Rs 26 lakh crore.