Leading handset makers including Oppo, Vivo, Micromax and OnePlus may invest as much as Rs 6,000 crore to assemble printed circuit boards (PCBs) in India. A new report states that this could be driven by the increased need to add local inputs into their products, following the recent customs duty hike.
According to a report by The Economic Times, industry sources have stated that keeping in mind key advantages, most smartphone makers have marked out sizable investments for the Indian market. These advantages take in account the recently imposed duties on certain components and the expected levy on imports of PCBs. The report adds that apart from smartphone makers, contract-based manufacturers such as Foxconn and Dixon have also planned further investments.
Representing a number of major handset makers in India, Pankaj Mohindroo, the President of the Indian Cellular Association (ICA), speaking to the publication said, "We’re expecting investments up to $900 million in two years until 2019 by all key players. About 350 SMT (surface mounting technology) lines are expected to be set up."
For the uninitiated, surface mounting technology (SMT) machines are required for assembling the components in PCBs. The process of assembling the PCBs is far more complex than having assembled PCBs imported, the primary reason why the Indian government wants smartphone makers to invest in making their PCBs in India.
To ensure that this is taken more seriously by handset manufacturers, the government is expected to levy basic customs duty (BCD) on assembled PCBs from the upcoming financial year. While PCBs account for 50 percent of the cost of making a phone, smaller components such as camera modules and connectors will also attract higher levies.