Chi­nese mo­bile phone sup­pli­ers eye In­dian mar­ket

The Pak Banker - - 6BUSINESS -

BEI­JING: For Chi­nese cell phone parts sup­pli­ers, In­dian mar­ket has much more temp­ta­tions than the over­ca­pac­ity-haul­ing do­mes­tic mar­ket, 21st Cen­tury Eco­nomic Re­port said on Wed­nes­day. Ac­cord­ing to an an­nual bud­get re­port re­leased by In­dian govern­ment in Fe­bru­ary, the im­port cus­tom duty for cell phone parts such as charg­ers, adap­tors, bat­ter­ies, head­phones and speak­ers rose from zero to 29.44 per­cent, the pro­duc­tion im­port duty for mo­bile phone's printed cir­cuit board (PCB) grew to 2 per­cent from zero. Con­sump­tion tax rate for lo­cally-pur­chased cell phone parts such as charg­ers and bat­ter­ies also rose from zero to two per­cent, started from March 1.

Ap­par­ently, such pol­icy shows In­dian govern­ment's hope to pro­duce mo­bile phone parts lo­cally. With the change of im­port duty, sev­eral bat­tery sup­pli­ers con­firmed to the news­pa­per that they will soon go to In­dia to in­spect the prospect of open­ing fac­to­ries so to ex­pand the mar­ket.

An un­named bat­tery sup­plier said that the change of im­port duty is a big lure for Chi­nese com­pa­nies' lo­cal­iza­tion as well as trade. "First come first serve, the ear­lier you get into the mar­ket, the less com­pe­ti­tion you have." Ac­cord­ing to sta­tis­tics from in­dus­try re­search in­sti­tute, al­most a hun­dred com­pa­nies on the mo­bile sup­ply chain have built fac­to­ries in In­dia and are busy in merg­ers and ac­qui­si­tions. The mi­gra­tion of the sup­ply chain is an in­ex­orable trend. To boost its man­u­fac­tur­ing in­dus­try, In­dian govern­ment has been ad­just­ing the trade pol­icy. Huang Hanzhou, gen­eral man­ager of a mo­bile sup­ply chain man­age­ment firm in Shen­zhen, said the In­dian govern­ment has a five-year-plan for its mo­bile phone in­dus­try and is at­tract­ing sup­pli­ers of parts who are less tech­nol­ogy-driven. When the mar­ket gets more ma­ture, the poli­cies will at­tract more high-tech in­dus­tries over. "If sup­pli­ers have fac­to­ries in In­dian, the im­port duty is only one per­cent. It makes a big dif­fer­ence."

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