Electronics industry urges cut in import tariffs

‘High rates negate benefits of PLI’

Pitching for a reduction in import tariffs for the electronics sector ahead of the Union Budget, the India Cellular & Electronics Association (ICEA) and IKDHVAJ Advisers LLP said in a report on Thursday that high import tariffs were making India less competitive in global markets as well as negating the effect of supportive policies such as the performance-linked incentives (PLI).

India’s tariffs had to be compared with those of competing countries such as China, Mexico, Thailand and Vietnam, according to the report, which includes a detailed study of 120 tariff lines of electronics priority products in India and these four key competing investment destinations. These imports constitute 80% of the cost of mobile phones —India’s largest product out of the $75-billion electronics sector.

The report stated that similar to India, its competing economies have also relied on a combination of trade and investment policies for their economic progress, with an emphasis on improving domestic capabilities to participate in global value chains and attracting and facilitating investment through subsidies, facilitation of trade and improving operational conditions for investors and domestic producers.