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NEW DELHI : Prices of mobile phones and large-screen televisions may become cheaper following a set of measures in the Union budget in a boost to the electronics and information technology sector.

Finance minister Nirmala Sitharaman proposed to halve the customs duty on open cells from 5% to 2.5%, while completely exempting duty on mobile phone camera lenses from 2.5% and on specific chemicals such as pre-calcined ferrite powder and palladium tetra amine sulphate, on which the duty was 7.5%. Palladium is used in parts of connectors in printed circuit boards (PCBs), which is used in all electronics.

She also announced plans to open three Centres of Excellence (CoEs) for artificial intelligence (AI), 100 5G labs in engineering institutions, and 30 Skill India International Centres for coding, AI, robotics, mechatronics, internet of things (IoT), 3D printing, and drones.

“This is a welcome move, and we will pass this benefit to customers. TV prices can come down up to 3,000 on larger screens (above 50-inch)," said Avneet Singh Marwah, CEO and founder, Super Plastronic Pvt. Ltd, a contract manufacturer of TVs. “This will significantly boost the domestic television manufacturing industry and help compete with global brands," added Arjun Bajaj, director, Videotex International, a contract TV maker. Industry experts said lower duty on components will also encourage component manufacturing in India. Vivek Tyagi, chairman, India Electronics and Semiconductor Association (IESA) said so far the focus was on electronics assembly, which creates a value addition of 7-8% of the total price of a device. “The duty reduction (on components) can increase the value addition for manufacturers by more than double, on a per-device basis. It can thus easily be at least 15-16%, which may make India a viable destination for electronics component manufacturing.," he said.

Muralikrishnan B, president, Xiaomi India, said a duty cut on select parts will help increase domestic value addition. “This will have a positive impact on the domestic component manufacturing industry," he added.

However, not all agree that phone prices will be cut. “These steps will have no significant impact on the final product price but are in the right direction. The cost impact on mobile phone’s Bill of Material (BoM) will be 0.16% to 0.19%," said Pankaj Mohindroo, chairman, India Cellular and Electronics Association (ICEA).

Presenting the budget, Sitharaman also proposed the introduction of a National Data Governance policy to make anonymized data accessible to startups and researchers. Lack of access to quality non-personal data to train AI models is a key challenge faced by startups working on AI projects.

The adoption of AI with a data utilization strategy can add $500 billion to India’s GDP by 2025, Nasscom said in June 2022 report. “The proposed three Centres of Excellence for AI is a decisive step towards promoting AI and allied technologies in India," said Ranjan Kumar, CEO of Entropik, an AI startup. The budget has also proposed to do away with the minimum threshold of 10,000 for levying TDS on winnings from online gaming. TDS will be charged even if the winning is under 10,000.

ABOUT THE AUTHOR
Abhijit Ahaskar
Abhijit writes on tech policy, gaming, security, AI, robotics, electronics and startups. He has been in the media industry for over 12 years.
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