Handset industry wants 4% incentive under MEIS to be reinstated

NEW DELHI: The handset industry has urged the government to extend additional export sops until December 31 to bolster India’s mobile phone exports.

With the expiry of additional ad-hoc incentive for January-March, the benefit for mobile phone makers under the Merchandise Export Incentives Scheme (MEIS) has fallen back to 2% from 4% even though the scheme has been extended to December 31.

“Partial restoration of MEIS is a step in the right direction,” Pankaj Mohindroo, chairman of the Indian Cellular and Electronics Association, told ET. “MEIS should be, to begin with, restored to the pre-March 31 level, which was 4% in the case of mobile phones.”

ICEA represents handset companies including Apple, Xiaomi, Oppo and Lava and contract manufacturers Foxconn and Wistron.

“In this highly distressed world economy, we should grab a share of whatever exports we can lay our hands on,” Mohindroo said. “China and Vietnam will unleash their humongous capacities onto the globe and we will be elbowed out even on the tiny export base which we have overall if we don’t act with extreme urgency.”

The Directorate General of Foreign Trade notified on Wednesday that benefits for exporters under MEIS will be available till December 31 and cease whenever new rates under RoDTEP (remission of duties and taxes on export products) scheme are notified.

Under MEIS, the government provides duty benefits of up to 4%, depending on the exported product and country. A separate production-linked incentive scheme, which will provide a benefit of 4%-6% to manufacturing companies, is scheduled to start on August 1.

“While a PLI scheme has been approved… it will take time to get operationalised and therefore, in the meantime, we should restore 4% MEIS and also raise MEIS on sub-assemblies and components like chargers to 4%,” Mohindroo said.