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The Central Government is fully prepared to take strict steps to rescue the local industry from the serious crisis in the Indian smartphone accessories market. The Directorate General of Trade Remedies (DGTR), functioning under the Ministry of Commerce and Industry, has formally recommended imposing anti-dumping duty on mobile covers and phone cases imported from China for a period of 5 years. Under this recommendation, a fixed duty (Cess/Duty) of ₹6.15 will be imposed on every Chinese mobile cover entering India, thereby directly putting a brake on the unfair trade practices of cornering the domestic market through cheap and substandard material.
The Indian smartphone market is one of the fastest growing markets in the world, with billions of handsets sold annually. Parallel to this, a huge market for mobile back covers, silicone cases and protective accessories has also been created. But for the last few years, Chinese exporters were selling these covers in India much below their normal production cost on the basis of very low production cost and government subsidy, which is called ‘dumping’ in trade rules.
The Directorate General of Trade Remedies has not taken this step out of the blue, but it involves a thorough and evidence-based investigative process that took months. The country’s domestic plastic moulding, silicone processing and smartphone accessories manufacturers had filed a detailed petition before the DGTR. In this petition, it was clearly proved that due to very cheap covers coming from China, the micro, small and medium units (MSME) producing in India are facing huge financial losses and many small factories have come to the point of being locked.
DGTR closely analyzed the landed cost of imported covers, local manufacturing cost and the price difference between the two. The investigation found that dumping of mobile covers in the Indian market was being done deliberately by Chinese companies so as to drive out local competitors from the market. To remove this anomaly and provide a level playing field to domestic manufacturers, it was considered essential to impose a charge of ₹6.15 per cover.
It is natural for most consumers to have a question whether this new tax will make it too expensive for them to buy a mobile cover. Experts assess that its impact at the retail level will be very limited and negligible:
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Covers available on roads and tracks: There may be a slight difference of ₹6 to ₹10 in the cost of non-branded covers, which are sold for ₹50 to ₹100 on the footpath and in local markets.
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Premium and Online Brands: Premium and branded covers, sold between ₹300 and ₹1,500, have higher margins than before, so companies will bear the burden of this nominal charge and there will be no impact on the end customer.
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Quality Improvement: Better quality non-toxic local covers will now be promoted in place of Chinese covers made of cheap recycled plastic and harmful chemicals.
The biggest benefit of this anti-dumping duty will be to the local manufacturers of the country and the ‘Make in India’ initiative. India had already become the world’s second largest hub for mobile handset manufacturing, but the component and accessories ecosystem still lacked self-reliance.
When protective duty of ₹ 6.15 is imposed on Chinese covers, orders will increase for local plastic and polymer injection molding units operating in industrial areas of Noida, Greater Noida, Chennai, Bengaluru and Pune. This will not only create thousands of new jobs locally, but will also encourage domestic companies to invest in new designs, stronger materials and innovation.
DGTR is only a quasi-judicial investigation agency that recommends measures if dumping is confirmed. Now this report has been sent to the Revenue Department of the Finance Ministry. This 5-year anti-dumping duty will come into effect with immediate effect on all ports and ICDs (Inland Container Depots) across the country as soon as the Finance Ministry issues a notification in the Official Gazette. This step of the government gives a clear message that India will not tolerate foreign dumping and will adopt all possible legal measures to protect the interests of the domestic industry.