As phone makers become 'exports first', they seek a competitive tax regime

The phone industry told govt that 99% of mobile phones sold in India are produced locally. For companies to grow, they need exports

Mobile phone makers are seeking a tax and tariff regime designed keeping in mind the taxes in countries like China and Vietnam as Indian companies aspire to increase their mobile phone exports, The Economic Times (ET) has reported. Top industry officials have told the government that the local market for mobile phones has saturated while there is a rapid rise in exports. As things stand, exports now make up 25 per cent of total local mobile phone production, the newspaper said.

The mobile phone manufacturers exported $11.1 billion worth of mobile phones in the financial year 2022-23, and the industry wants to achieve the target of exporting $ 50 billion worth of mobile years in the upcoming years.

 

A senior official at one of the top mobile phone companies told The Economic Times, "We have held meetings with senior officials at the Ministry of Electronics and IT (MeitY), Finance Ministry, and NITI Aayog across the last two weeks and discussed the need to shift focus and resultant policies to build India's export competitiveness."

Exports crucial for mobile phone makers

Besides this, the industry has also highlighted that 99 per cent of all mobile phones sold in India are made in the country. While this is a welcome change, it also implies that since mobile companies have covered almost all of the domestic market, they need to expand their exports to utilise additional production capacity, investments, and employees.

Mobile phone exports from India

At the end of FY23, Indian mobile phone manufacturers exported about Rs 90,000 crore or 25 per cent of total mobile phones produced in India. This had a mammoth share of iPhones, which contributed nearly 50 per cent of all exports, the report added.

In FY24, the first seven months registered a slowdown in domestic demand for low-cost and mid-range mobile phones. The high-end market registered a healthy demand nonetheless, the ET report said. Exports of mobile phones from April to October 2023 have exceeded Rs 65,000 crore. Nearly 75 per cent of these exports were Apple's iPhones.