Finance Minister Arun Jaitley on Thursday announced an increase in basic customs duty by up to 10 per cent for all telecommunications products that are outside the purview of the information technology agreement. As a result, the prices of smartphones, tablets, PCs will be going north.
Many analysts believe this to be a non-starter for the manufacturing industry in the country.
“It’s a misplaced policy. It will do very little or nothing for the ecosystem in the country,” said Sanchit Vir Gogia, CEO and Chief Analyst, Greyhound Research.
He added that the same strategy was adopted by the previous UPA government, which levied a 6 per cent tax on imported mobile phones costing above Rs 2,000 and yet local vendors like Micromax still source their products from China.
“India does not need to reinvent the wheel. It should rather invest in an open software platform that works on top of the hardware. India should rather leverage the IP and software capabilities that are available in the country.”
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