Customs halt smart phone production as component shipments held up by customs

Smartphone production in India is set up for another disruption as component shipments are being held up by the customs department. Smartphone manufacturers In India are facing another disruption due to a recent change in import policy. Shipments of components like flat panel displays and camera modules have been held up by customs since Feb 9, 2022.

Experts believe that production will be badly hit if these are not cleared soon. A DGFT (Directorate General of Foreign Trade) notification dated Feb 9 said that the status of specific components, which were previously “Free” has now been changed to the “Restricted” category. Goods classified under Free do not
require permission from DGFT whereas the latter does.

Pankaj Mohindroo, Chairman, ICEA (India Cellular and Electronics Association) told ET recently, “Serious disruption has been caused. The matter is getting resolved between DGFT, MEITY, and DOR (Department of Revenue). ICEA represents top smartphone brands like Apple, Oppo, Vivo, Xiaomi, Lava and contract manufacturers like FOXCONN and Flex.

The latest disruption has badly hit launches and has forced price hikes. Ajay Prakash Sawhney, Secretary, ICEA in a letter to MEITY said that the notification was issued for any warnings or consultations. Handset companies say that flat panel displays are essential parts of phones, TVs, notebooks, tablets, and
computers, all in one PC.

“These segments are not available in India, hence imports are essential, said an Executive. Queries sent to Apple, Samsung, Oppo, Vivo, and Xiaomi, haven’t elicited any response so far in this regard.