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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting

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Jan 16 9:30 AM EST

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To: John Biddle who wrote (33015)	3/2/2003 7:48:41 PM
From: John Biddle	Read Replies (1) of 197271

Excise Sop To Push Handset Manufacturing Our Efe Bureau financialexpress.com New Delhi: In what could encourage telecom companies to set up handset manufacturing facilities in India, the finance minister has exempted mobile handset and its components from excise duty in his Budget recommendations for the year 2003-04. This would mean that manufacturing handsets in India will now be much more financially viable and the excise exemption can give a commercial advantage to the companies as compared to importing the handset. After the government removed countervailing duty (CVD) — which was to the tune of 16 per cent — on import of handsets in last year’s Budget, imports had become a cheaper option as compared to manufacturing them in the country. The import duty on handsets is currently at 10 per cent with a special additional duty of 4 per cent while excise duty is 16 per cent. When contacted, Korean handset manufacturer LG Electronics vice-president (CDMA terminals) KK Kushwaha said, “Exemption from excise will encourage the manufacturers but the decision to set up manufacturing will also depend on the size of the demand (volume) and business viability.” Manufacturers Association of Information Technology (Mait) executive director Vinnie Mehta also said that the move may initiate handset manufacturing in India. “This clearly shows that the government wants to promote the manufacturing of handsets. With an annual 10 million handset market in the country, setting up manufacturing facilities will also be financially viable,” Mr Mehta said. However, Indian Cellular Association (ICA) president Pankaj Mohindroo was not much impressed with the excise exemption. “It will not have any immediate impact as there is virtually no handset manufacturing happening in India at present. However, it is a good step and will encourage manufacturing operations in the future. I think that the finance minister should have taken a holistic view of the handset industry and could have reduced the import duty on handsets to make a positive impact on the handset market,” he said. ICA is an industry association of mobile handset manufacturers, distributors and resellers.

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