India Import Tariff Adjustment Mobile Phone Supply Chain Manufacturers Covet India to Set up Factory
2016-03-09 00:00
For domestic mobile phone supply chain manufacturers with serious overcapacity, any disturbance in the tempting Indian market affects their sensitive nerves.
On February 29, the Indian government released its 2016 annual budget report, launching a railway and highway investment plan totaling 2.18 trillion rupees, as well as a number of reform rules involving foreign investment. Among them, the import tariff on the production of mobile phone chargers, adapters, batteries, wired headphones and speakers increased from 0 to 29.441 per cent; the import tariff on the production of mobile phone PCBs (printed circuit boards) changed from 0 to 2 per cent; the consumption tax rate for local purchases of chargers, adapters, batteries, wired headphones and speakers by mobile phone manufacturing companies has changed from 0 to 2% (suppliers choose not to deduct input) or 12.5 (suppliers choose to deduct input), effective March 1.
Obviously, the Indian government hopes that mobile phone accessories such as batteries and chargers can be localized. With the adjustment of tariffs, a number of digital communication battery manufacturers confirmed to the 21st Century Business Herald reporter that they will go to the Indian market in the near future to investigate the conditions for setting up factories and conduct market development.
"Tariff changes are huge bait for landing or trade. To go first is to seize the market first, and few people share the cake." When it comes to exploring the Indian market, a Dongguan battery manufacturer cannot hide his excitement.
According to the statistics of the Rising Sun Mobile Terminal Research Institute, there are currently nearly 100 supply chain companies building factories and mergers and acquisitions in India, and the accelerated migration of the supply chain is an inevitable trend.
In order to revitalize the manufacturing industry, the Indian government has continuously adjusted its foreign trade policies, and tariffs are one of the most important means. The import duty rate on mobile devices was raised from an initial 1 per cent to 6 per cent, and then sharply increased to 12.5 per cent in March 2015. Due to the high import tariff of the whole machine, the SKD (semi-packed parts) model will still be the main trade mode in the Indian mobile phone market for some time to come.
Huang Hanzhou, general manager of Shenzhen Tianyi Supply Chain Management Company, explained that starting from March 1, the comprehensive tax rate for mobile phone accessories such as power banks, data cables, and chargers will be 29.441, while mobile phone accessory manufacturers themselves or their customers are in India If there are factories, the import tariff is only 1%. There is a big difference between having factories and not having factories in India.
"The Indian government has a five-year plan for the mobile phone industry. At this stage, it wants to attract some manufacturers with relatively low technical requirements, such as data cables and mobile phone chargers, through tariff adjustment. When it develops to a certain stage, it will continue to attract industries with high technology content through policy guidance," Huang Hanzhou said.
According to data from TrendForce's Tuo Yun Industry Research Institute, India shipped 71 million smartphones in 2015, accounting for 25% of the total shipments. Huang Hanzhou, according to his personal experience in supply chain management in India for many years, believes that the penetration rate of intelligent machines in India has not exceeded 15%. India smart phone change tide is coming, the market prospects are beyond doubt. In addition, Huang Hanzhou introduced that with the support of Citibank, India has just completed the collection of population identity information. Once Indians have a unified ID card, banks will be able to carry out credit business and consumption power will be greatly improved.
In contrast, China, which has formed the most complete mobile phone supply chain system in the world, is facing a reshuffle crisis of the mobile phone industry chain. According to GfK data, the current average sales price of new phones in India is between 60 and 70 US dollars, which undoubtedly provides suitable survival soil for small and medium-sized enterprises in the domestic mobile phone supply chain. For Chinese manufacturers who want to take a share of the Indian market full of growth potential and demographic dividend in the future, they may have to spill real money first.
However, an integrated IC marketing manufacturer also told the 21st century economic reporter that setting up factories in India is not without risks. India currently lacks mature industrial clusters. In addition to the cost of setting up factories, there are also issues such as technology and production line recovery costs that need to be considered. "For accessories manufacturers with slightly higher technology content of smart phones, they are still in the wait-and-see stage, and the outbreak point is still unclear". At the same time, he said frankly that the Indian market is the last chance for domestic mobile phone industry chain manufacturers. If the Indian market is also saturated and flooded, the mobile phone industry chain can only become a game for a few giants.
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2016-03-15
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