Budget 2020: Mobile, Electronics Manufacturers Have Something to Cheer

While Indian Finance Minister Nirmala Sitharaman’s Union Budget 2020 has received mixed reactions across industry sectors, the tech manufacturing sector seems to be upbeat. They believe that the FM’s push for the manufacturing of mobile phones, semiconductors, and electronics is a good sign for companies looking to invest in India.

Sitharaman proposed a government scheme that will boost the manufacturing of mobile phones and electronic equipment in India. The announcement comes as an extension of the government’s flagship ‘Make in India’ program, she said. Even though Sitharaman did not give details on the soon-to-be announced scheme, she said it will boost the production of electronic equipment and semiconductors that are integral for the assembly for consumer-end devices such as mobile phones, tablets, televisions, and more.

Currently, mobile phone manufacturers such as Samsung, Xiaomi and Oppo have begun producing their smartphones locally, unlike earlier when it only assembled devices. Local manufacturing units also create more employment in the country something that is another major focus area of the central government. Not only the domestic manufacturing of mobile phones, but the government also wants the companies to aggressively venture into R&D within the country.

Nitin Kunkolienker, President-MAIT, said, “The emphasis on Mobiles, the largest import bill in electronics and ATMP is welcome. The government needs to include IT, datacom, medical and other sub-sectors of electronics. While the scheme is still in the works, this will result in rise in exports from India.”

Chandrahas Panigrahi,  CMO and Consumer Business Head,  Acer India believes that the government’s move on encouraging manufacturing of electronic equipment in India is also a big step as this would provide much needed impetus to technology and manufacturing sector, which has been developing capacities and generating employment opportunities. Also, more focus on technology such as Machine Learning, Robotics, AI will support the industry to grow and establish India as a robust ecosystem for technology and innovation,” he said.

Welcoming the government’s decision for boosting electronic manufacturing in the country, Rajesh Uttamchandani, Director, Syska said, “An important step taken is the further push provided by the Government for its smart cities mission. It aims to create 100 cities with state-of-the-art infrastructure that includes intelligent lighting, Wi-Fi access points, leading to enhancement of the quality of life of every citizen while building efficient living spaces for future generations.”

Also, the budget provides emphasis on making every district of the country an export hub, with the Government allocating Rs 27,300 crore for the development and promotion of industry and commerce in 2020-21. “This initiative will enable Indian companies to develop the infrastructure and manufacturing capabilities required to build products that can be exported,” said Bishan Jain, Director, Goldmedal Electricals.

Leon Yu, Regional Head, India & South Asia, Asus said, “With the FM proposing a scheme to encourage mobile phones, semiconductor packaging, and electronic equipment. The new scheme, Nirvik, is also going to offer respite for exporters, promising to settle refunds for electricity and VAT previously levied.”

Manu Jain, Global VP and India MD Xiaomi and Governing council MAIT, added, “Government’s move on increasing the threshold for small business requiring audit from Rs 1 crore to 5 crore, if cash transaction is less than 5%, is a welcome move. This will spur technology adoption by them which will further increase the demand for PCs and POS.”

In retrospect, while we believe, the manufacturing sector has something to cheer in the latest Union Budget; India indeed needs a strong domestic manufacturing policy. And it needs to further implement the policy, so as to enhance the ease of doing business and incentivize big businesses to invest in domestic start-ups and SMEs. While the government has given due importance in terms of facilitating foreign investments in India, it is time to gear up and promote more local innovations under the ‘Make in India’ campaign.