Smartphones Likely To Get More Expensive Now: 10 Things To Know

Smartphones Likely To Get More Expensive Now: 10 Things To Know
Currently, most mobile phone manufacturers import PCBs to India and then assemble them
  1. A populated printed circuit board (PCB) is a bed for key components such as processors, memory and wireless chip sets that are the heart of an electronic device. Once populated with components, PCBs account for about half the cost of a smartphone.
  2. Currently, most manufacturers of smartphones import PCBs which are already loaded with components to India and then assemble them locally.
  3. The proposal is awaiting finance ministry's approval. Once cleared by the finance ministry, recommendation on new duties could be levied in a few days, the government and industry sources told Reuters. This would make populated PCB imports more expensive and pushing players to locally mount components instead.
  4. In the near-term, such actions could spur players like Apple Inc to widen their limited manufacturing and assembly capabilities in India and give an edge to those like Korea's Samsung Electronics and homegrown firm Lava, which already have machines to mount components onto PCBs.
  5. China's OPPO is also putting up surface mounting machines in a new facility it is building in north India, a company executive told Reuters in a recent interview. The local unit of Foxconn, one of the biggest global contract manufacturers of electronics, also has the capability, according to two industry sources. This will be a step in a good direction. This is how full-scale manufacturing happens," said S.N. Rai, co-founder of Lava, adding the move will gradually also boost local production of components such as smartphone cameras and screens.
  6. The move, if implemented, would be the latest step in Prime Minister Narendra Modi's phased manufacturing programme (PMP), a plan unveiled in 2016 to step up local value addition every year in the smartphone manufacturing space.
  7. PM Modi hopes to turn India into a global manufacturing hub in a bid to boost growth and create tens of millions of new jobs. While his flagship 'Make in India' drive is still a long way from delivering on lofty job promises, Modi has had some success with the PMP. Over 100 local factories currently assemble mobile phones and accessories like chargers, batteries, powerbanks and earphones in India, says tech research firm Counterpoint.
  8. The PMP currently envisions local assembly of camera modules and printed circuit boards in the fiscal year beginning April 1, according to a public electronics ministry document.
  9. PM Modi's government has since raised duties on a range of low-value items such as batteries and chargers and on imported phones.
  10. Any move to impose duties on populated PCBs, however, could risk a backlash from several countries and heighten trade war concerns. China, Canada and the United States among others last week raised concerns at the World Trade Organization around India's imposition of duties on such devices.
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