NEW DELHI: This budget is pretty regular with a mix bag of things, nothing path breaking or outstanding to boost the manufacturing sector, according to Syed Tajuddin, CEO, Coolpad India.
“For agricultural and rural economy there is some really positive news, but not great hints for the Consumer durable and mobile handset industry. The increase in custom duty from 15% to 20% will definitely hamper the cost to customer, especially when it comes to getting repairs for the high-end devices,” he said.
“While increase in custom duty on handsets will compel brands to manufacture or assemble more in India, still there is not great support for local ecosystem for manufacturing spare parts. And this lack of local spare part manufacturers will mean a tough situation for mobile handset brands. Hence a brand is compelled to import most of the spare parts and customers have to bear some burden of it,” Tajuddin added.
In the first General Budget 2018-19 after the roll-out of the Goods and Services Tax (GST), the Union Minister for Finance and Corporate Affairs, Arun Jaitley, made a calibrated departure from the underlying policy in the last two decades, wherein the trend largely was to reduce the customs duty. In the General Budget 2018-19 presented in Parliament.,
Jaitley acknowledged there is substantial potential for domestic value addition in certain sectors, like food processing, electronics, auto components, footwear and furniture. The Finance Minister thus proposed to reduce customs duty on raw cashew from 5% to 2.5% to help the cashew processing industry.
To further incentivise the domestic value addition and Make in India, the Finance Minister proposed to increase customs duty on mobile phones from 15% to 20%, on some of their parts and accessories to 15% and on certain parts of TVs to 15%.“This measure will promote creation of more jobs in the country’Jaitley added. In fact, this will make the domestic items cheaper than imported ones and will generate more demand which, in turn, will create more employment opportunities for the people at large.
Foxconn to resume operations at Tamil Nadu plant; facility under probation by Apple
NEW DELHI: Apple supplier Foxconn Technology Group on Monday said it has implemented a range of corrective actions and will start bringing back team members gradually to the Sriperumbudur factory, which was shut down last month following a mass food-poisoning incident at the plant’s offsite dormitory facility.
The factory located on the outskirts of Chennai in Tamil Nadu was shut down on December 18 after workers’ protests on the back of a mass-food poisoning incident at the offsite dormitory facility.
“We have been working on a series of improvements to fix issues we found at the offsite dormitory facilities at Sriperumbudur and to enhance the services we provide to our employees. We have implemented a range of corrective actions to ensure this cannot happen again and a rigorous monitoring system to ensure workers can raise any concerns they may have, including anonymously,” Hon Hai Technology Group (Foxconn) said in a statement.
The company also said it will “gradually begin to welcome back team members as each offsite dormitory becomes ready and is approved”.
According to sources, operations will be gradually resumed at the factory as hostels and dormitories get ready and certified as per local requirements by the government and Apple’s audits.
An Apple spokesperson said the Sriperumbudur facility continues to be on probation and that the company is closely monitoring the situation.
“For the past several weeks teams from Apple, along with independent auditors, have been working with Foxconn to ensure a comprehensive set of corrective actions are implemented in the offsite accommodations and dining rooms at Sriperumbudur,” the spokesperson said.
Workers will start to return gradually as soon as Apple is certain its standards are being met in every dormitory and dining area, the spokesperson emphasised.
Apple had put the Sriperumbudur factory of the iPhone assembler Foxconn on ‘probation’ following worker protests and an assessment that revealed substandard living conditions, saying it will ensure strict standards are met before the unit reopens.
While the companies did not comment on the expected timelines for full resumption of operations, the sources said full resumption of operations at the plant will take more time and workers will only be brought back in a phased manner over the next few months.
The factory has more than 15,000 people working on production of Apple products.
According to the sources, there has also been a management change at Foxconn India with a change of guard locally and introduction of new systems to better manage the factory and employee facilities.
The commercial production of the newly-launched iPhone 13 series was reportedly expected to start at the Foxconn plant by February. It is unclear if Apple’s probation would affect these plans.
Source: Press Trust of India
Apple supplier Murata expects half billion 5G phones in new year
By Takashi Mochizuki and Yuki Furukawa
NEW DELHI: Murata Manufacturing Co., the world’s biggest maker of ceramic capacitors for Apple Inc. and other smartphone brands, expects demand for fifth-generation wireless devices to surpass 500 million handsets in the coming fiscal year, building on a rush to replace Huawei Technologies Co. in the global consumer arena.
Apple, Samsung Electronics Co. and Chinese rivals Xiaomi Corp., Oppo and Vivo are vying to secure components for their devices, hoping to fill a void as Huawei’s mobile business shrinks under the weight of U.S. sanctions. President Norio Nakajima said in a December interview that Murata’s factories won’t be taking a holiday break as they work to catch up with mounting orders, adding “the situation is most severe with our cutting-edge capacitors for smartphone use.”
“These handset makers are competing to grab our supply capacity once taken by Huawei, and I am not sure how much of it is backed up by their actual production forecast,” Nakajima said. “I feel like the move is overheated, and thus expect their orders would drop in February and March.”
Murata is the global leader in MLCC, or multilayer ceramic capacitors, used to regulate electric flow in circuit boards. Hundreds, sometimes thousands of them are attached to electronics ranging from smartphones to automobiles.
“The industry had 300 million units of 5G smartphones during the current fiscal year, and I expect that to increase to at least 500 million in the next fiscal year,” the president of the Kyoto-based company said. “We will continue making capital expenditure to keep up with the growing demand.”
Analysts deem the Murata chief’s stance too conservative. Ace Research Institute’s Hideki Yasuda doesn’t expect demand from Apple and its ilk to drop at any point in this calendar year, fueled by stronger-than-anticipated consumer appetite for 5G phones. Handsets set to be released this year are also going to be compatible with a wider set of frequencies, expanding the need for Murata-made components to adjust electricity flow.
Yasuda said Murata’s production hiccups are representative of severe shortages across the electronics supply chain, affecting the assembly of many products, including video game consoles. Sony Corp.’s PlayStation 5 and Microsoft Corp.’s Xbox Series X both remain limited in supply, nearly two months after their initial release.
Murata’s Nakajima doesn’t dispute that demand for its MLCC would remain strong throughout this year, though he said he expected a brief respite after China’s Lunar New Year holiday. He said the company’s MLCC sales would increase by 10% in its next fiscal year starting in April due largely to 5G phones.
Uttar Pradesh approves financial incentives for Samsung display factory
NEW DELHI: India’s northern state of Uttar Pradesh on Friday said it will give financial incentives to South Korea’s Samsung Electronics Co to set up a 48.25 billion rupee ($654.36 million) display factory.
Samsung is re-locating the factory to the state from China, the Uttar Pradesh administration said in a statement, a move that will help boost Prime Minister Narendra Modi’s flagship drive to make India a manufacturing hub.
India is the world’s second-biggest smartphone market with significant growth potential, which has driven companies such as Samsung to expand locally.
New Delhi earlier this year also approved financial incentives–under a $6.65 billion federal plan to boost domestic smartphone production–for 16 companies, including Samsung and top Apple suppliers Foxconn, Wistron and Pegatron.
On Friday, Uttar Pradesh said Samsung will receive 7 billion rupees in financial benefits and will also get an exemption from a tax payable on the transfer of land for the factory.
Samsung had sought tax and other incentives from Uttar Pradesh for this smartphone display manufacturing plant, Reuters previously reported.
The unit, expected to create 510 direct jobs, is expected to be operational next year.
Samsung already operates one of the world’s biggest mobile phone manufacturing plants in Uttar Pradesh.
Source: Reuters, Reporting by Sankalp Phartiyal in New Delhi and Saurabh Sharma in Lucknow; Editing by Sam Holmes
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