On Tuesday, Finance Minister Nirmala Sitharaman presented the Union Budget for 2024-25. Among the announcements, one may concern mobile users, potentially leading to higher mobile tariffs. The Union Minister announced an increase in duties on Printed Circuit Board Assemblies (PCBA) for telecom equipment, directly impacting mobile users.
Telecom Companies’ Response
In early July, Reliance Jio, Airtel, and Vi already raised their recharge plan prices. With the new increase in PCBA duties, these companies might further hike their plan prices. This added cost for telecom equipment could hinder the progress of the 5G rollout. Higher operational costs might lead to increased recharge plan prices for customers.
Network Expansion Challenges
The rise in PCBA prices could impede telecom companies’ network expansion efforts, placing a greater financial burden on them. Consequently, the 5G rollout might face delays and challenges.
Reduction in Customs Duties
During her budget speech, Sitharaman also announced a reduction in customs duty on mobile phones, mobile PCBAs, and mobile chargers from 20% to 15%. She highlighted the growth of the Indian mobile industry, noting that domestic production has increased threefold and mobile phone exports have increased 100-fold over the last six years. Sitharaman stated, “With a threefold increase in domestic production and almost a 100-fold jump in exports of mobile phones over the last six years, the Indian mobile industry has matured. In the interest of consumers, I now propose to reduce the Basic Customs Duty (BCD) on mobile phones, mobile PCBA, and mobile chargers to 15%.”
Exemptions for Critical Minerals
The government plans to exempt lithium, copper, and cobalt from customs duties. These minerals are essential for several high-tech industries. Additionally, customs duties on 25 critical minerals will be either eliminated or reduced, benefiting industries heavily reliant on these resources.
(With inputs from agencies)
