Local electronics parts may win budget boost

Higher import duty on components aimed at increasing local production

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The Union budget may raise customs duties and rework import procedures for components in a range of household appliances, aiming to encourage the local manufacturing of these intermediate goods as in the case of mobile phones. The measures are also expected to ease trade and make their exports competitive, two people aware of the development said.

The changes will be part of simplified customs duties and procedures in select consumer goods sectors to be announced in the Union budget, the people cited above said on the condition of anonymity. The move follows the approach taken in mobile phones, where the government initially encouraged local manufacture of finished phones with production sops, followed by higher duties on parts to discourage imports and promote local production.

Calibrating customs tariffs to improve the viability of investments in finished products and the intermediate stages of production for items such as air-conditioners, washing machines and telecom equipment will encourage backward integration of facilities, one of the two people said.

"The government is POW reviewing the customs duty rate structure to make it simpler and fairer. This will help ease trade, reduce disputes and support manufacturing and exports.