Handset makers want a further extension of additional export duty incentive

NEW DELHI: Handset makers and contract manufacturers want a further extension of the 2 percent additional duty incentive under the Merchandise Export from India Scheme (MEIS) on mobile phone export which the Indian government Thursday restored and extended till March 31, 2020.

“We are glad that there is clarity on MEIS till 31st March, 2020; but there needs to be a further extension,” Pankaj Mohindroo, Chairman of ICEA told ET. India Cellular and Electronics Association (ICEA), which counts Apple, Foxconn, Xiaomi, Oppo, Vivo, Lava and Flextronics as its members.

“Uncertainty around MEIS was an extreme chill factor. The huge momentum which we were witnessing in mobile phone exports started thawing in December 2019. Due to the uncertainty around MEIS duty benefit, mobile phone exports dropped to Rs 2,070 crore in December 2019 from Rs 3,000 crore in November 2019,” Mohindroo said

The growth in 2018-19 in mobile phones export was 850% or Rs 1,300 crore to reach Rs 11,300 crore. “Till December, exports are Rs 19,500 crore. The blip in the growth in December 2019 can be directly attributed to the uncertainty around MEIS,” he further added.

“A 2 percent additional ad hoc incentive for mobile phones is notified for exports made with let export date from January 1 to March 31, 2020,” the Directorate General of Foreign Trade (DGFT) has said in a notification. DGFT is an arm of the commerce ministry which deals with issues related to exports and imports.

In the wake of this uncertainty, mobile handset brands and third-party manufacturers were said to be putting their investments and hiring plans on hold and said that such a situation would “devastate” handset exports from India, resulting in large-scale job losses.

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Vikas Agarwal, General Manager, OnePlus India said that the policy for exports needs to provide an opportunity to plan for the long-term. “We are comfortable with whatever the government is bringing. India is the most important market, and whatever steps are necessary, we will keep taking it. Our stand is very clear, as long as the policy is consistent and transparent and is in the national interest, we completely support it,” he said. He, however, didn’t comment on the duty restore.

Oneplus recently started exports of its 5G and 4G smartphones from India to the US and Europe, and said that it may also look at exporting smart TV as well.



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