Union budget 2015-Pankaj Mohindroo, National President-ICA

Pankaj Mohindroo, National President – ICA

“The step up in the differential from 5% in the pre-budget dispensation to the current 11% is designed to create the necessary pull for investments from India and abroad into the industry and will realize the “Make in India” programme.

However, the Government will have to fine tune the differential keeping in mind that smuggling of finished mobile phones into the country from China has always been a big problem. The 11% differential when added to high VAT rate of 15% in major states will be very lucrative preposition for the grey market operators. The previous NDA Government in the 1999-2004 period had brought the Excise duty down to zero on mobiles to curb smuggling from China. Even without the differential, FDI flowed into India with an organized World’s largest factory in Chennai was set up by Nokia during this period only.

Currently, the mobile market has grown to a high of Rs 1 Lakh Crores with compound growth rate of 30% plus. The differential will ensure that hunger of the Indian consumer can be fed by domestic manufacturing. But this has to be done in a manner which does not result in price rise for the common man, specifically in the low price feature phone segment.”