Home >Budget 2019 >News >Budget 2020: Proposes scheme to boost mobile, electronics manufacturing

NEW DELHI: Finance Minister Nirmala Sitharaman’s 2020-21 Union Budget on Saturday proposed a policy to encourage manufacturing of electronics and semiconductors in India. While the details of the scheme will be unveiled later, the scheme is of course meant to boost the manufacturing of mobile phones and other electronic equipment in India.

“New manufacturing policy for electronics goods and plans to encourage manufacturers of mobile phones semiconductors will support development of EV ecosystem and supply chain," said Rajeev Singh, partner, Deloitte India.

Spend on import of mobiles and electronics has emerged as one of the biggest drains on India’s foreign exchange.

The move seems to be meant to boost the Narendra Modi government’s ‘Make in India’ initiative. While electronics like mobile phones aren’t fully manufactured in India yet, many mobile phone makers have in last two years started assembling smartphones and feature phones in the country even as imports continue to service a major part of the demand. Taiwanese manufacturer Foxconn makes phones for Xiaomi in its factories at Andhra Pradesh and Tamil Nadu.

South Korean Samsung had recently announced that it would be investing $500 million in India over a three year period in order to make smartphone displays in the country. The company is reportedly setting up a plant in the National Capital Region’s Noida area for the same.

While many of the top smartphone players in India have started manufacturing in India, so has American tech giant Apple. The company makes its iPhone XR, iPhone SE and iPhone 6S models in India.

“It’s good that the government has time and again recognised the value of electronics manufacturing, especially mobiles, in today’s economy. India is a consumer market as well as a potential exports hub," said Faisal Kawoosa, founder of research firm techARC. “We wanted to see a new scheme to make value added manufacturing competitive. This should benefit existing players to expand and brands like Apple to scale up" he added while noting that the details of the scheme are yet to be seen.

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