India Is Said to Mull Smartphone Component Levy, Reuters Reports

(Bloomberg) -- India is said to be considering new duties on the import of a key smartphone component in a bid to promote domestic manufacturing in the world’s fastest-growing smartphone market.

India’s Ministry of Electronics and Information Technology has mooted a proposal to impose a 10 percent duty on imports of populated printed circuit boards, Reuters reports, citing two unidentified government officials. A PCB is a bed for key components such as processors, memory and wireless chip sets that are the heart of an electronic device.

The duty could be imposed in days if the finance ministry clears the recommendation, making populated PCB imports expensive and forcing companies to assemble components locally, according to the report.

Bloomberg News could not reach senior officials at the electronics & information technology, commerce or finance ministries for comment on Sunday.

Prime Minister Narendra Modi has been pushing companies to establish more manufacturing operations through his “Make in India” program. Higher duties may push Apple Inc. to expand its manufacturing and assembly capabilities in the country and give it an edge over its rivals such as Samsung Electronics Co. and Xiaomi Corp.

In February, India’s government raised custom duties on imported mobile phones to boost local production of components. Apple has been seeking to expand its presence in India and has negotiated with the government for lower tariffs on certain components.

--With assistance from Daniel Zuidijk Shruti Srivastava and Santosh Kumar

To contact the reporter on this story: Bibhudatta Pradhan in New Delhi at bpradhan@bloomberg.net.

To contact the editors responsible for this story: Bruce Grant at bruceg@bloomberg.net, John McCluskey, Colin Keatinge

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