New Delhi: Mobile phone production in the country is expected to reach USD 190 billion by 2025 on the back of enabling policy environment and lower corporate tax rate, according to industry body ICEA.
Smartphone market leader Xiaomi said corporate tax cut will enhance job generation capability in the industry, invest more in product development and encourage more component suppliers to set up their factories in India.
"Total handsets produced in India clocked 290 million units valued at Rs 1,81,000 crore (nearly USD 25 billion) during 2018-19," ICEA said.
Electronic component makers body ELCINA said the rate cut in corporate tax from 30 to 22 per cent and a minimum alternate tax (MAT) from 18 to 15 per cent is historic and a boost to the slumbering economy and "it will wake up the sleeping giant".
"With such enabling policy environment in place, it would not be impossible to reach the mobile handset manufacturing target of USD 190 billion by 2025 which is about 50 per cent of the total electronics manufacturing target with a total export target of USD 110 billion," ICEA Chairman Pankaj Mohindroo said in a statement.
He said mobile handset manufacturing has already witnessed a significant growth trajectory during the past 4-5 years leading to significant export take-off.
"Mobile handset exports have already crossed USD 1-billion mark during the first four months of the current financial year. In fact, there has been a record export growth of 800 per cent in 2018-19, compared to exports achieved in 2017-18," Mohindroo said.
Xiaomi said corporate tax reduction from the government is a welcome move to all domestic companies.
"Post the relaxation for domestic manufacturing firms, we are hopeful that we would be able to bring more of our component suppliers to India and help boost the local manufacturing industry further," Xiaomi said.
Indigineous mobile phone company Jaina Group, which owns Karbonn Mobiles brand, said reduction in corporate tax will help the company divert more funds in manufacturing activities.
Jivi Mobiles Marketing Head Harsh Vardhan said the company will pass tax rate cut benefit to the consumers that will boost demand in the market.
ELCINA Secretary-General Rajoo Goel said the reduction in taxes will help attract foreign investors to establish companies and manufacture in India as these rates match the corporate tax rates offered by competing countries, such as Vietnam and Thailand.
Belgium-based display technology firm Barco said the lowering of corporate tax will add much-needed fillip to the government's "Make in India" initiatives.