Handset manufacturing can be incentivised through GST: Research

Published: 13th December 2016 01:44 AM  |   Last Updated: 13th December 2016 07:19 AM   |  A+A-

By Express News Service

BENGALURU: Broadband India Forum (BIF) in its research paper with Ernst and Young (EY) highlighted the need to increase the production of smartphones and handsets in India as the country embarks on an ambitious project with the ‘Digital India’ program.

With online media consumption growing in the last few years, mobile devices have taken over as the preferred medium of consuming online media. With most users accessing internet via mobile phones, mobile devices are expected to reach the masses.

“While Broadband infrastructure is at one end of the issue, Customer Premise equipment is at the other. The Broadband device today is a smartphone. We need to increase Smartphone penetration as India has less than 30% smartphone penetration. This can only happen through local manufacturing and by further increase of local value addition.

Further, BIF along with EY is proposing an innovative way using GST to incentivise handset manufacture. This we believe is a win-win formula,” said T.V. Ramachandran, President, BIF.

With an expansion of 4G network along with affordability and indigenisation of smartphones there is more scope for mobile broadband penetration to the next level via handsets.

 “It is expected that the adoption of smartphone in India will go up to 688 million by 2020 as compared to 238 million in 2015. With the introduction of GST, most of the current Centre and state taxes/duties will be subsumed under GST,” said Bipin Sapra, Partner EY.

Infrastructure, manufacturing ecosystem, skilled manpower, technology and R&D facilities are the other factors apart from GST that will support manufacturing in India.

India’s value addition may touch 32% in 2020

A recent study conducted jointly by IIM Bangalore and Counterpoint Researchers highlighted that the value addition in India is approximately six per cent under  the current state of manufacturing in India. This can be increased to 32 per cent in 2020 wherein the most of the manufacturing processes in India. Thus, providing incentives can be a start to build the ecosystem for mobile handset manufacturing and bringing value addition in India.


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