Government Boost to Manufacturers, Eases Import of Used Machinery

The government has made it easier to import used machinery, which will make manufacturing of mobile phones and equipment smoother for companies in India.

According to the latest notification by the Ministry of Environment, Forests and Climate Change (MoEF), used plant machinery having residual life of at least five years for manufacturing electronics and electrical items would not require explicit permission from the 'hazardous and other waste committee'.

Until now handset and other component assembly and manufacturing units would have to wait for the committee to meet every few months for permissions, but now companies just need to submit the necessary documents and import the machinery used for manufacturing electronics and electrical items, and not seek explicit permission.

“This is a very positive step to improve ease of doing business. Our industry's vigorous capital investment cycle is beginning and we are greatly encouraging capacities to be shifted to India. The decision clearly shows the Government of India’s (GOI’s) intent on reform, perform and transform. Needless to say, this step will reduce the clearance time to a few days compared to few months in the earlier regime,” said Pankaj Mohindroo, national president, Indian Cellular Association.

Industry insiders said that MoEF keeps a check on the import of used goods and also hazardous wastes but, capital machinery like SMT lines (surface mount technology) lines used to populate PCBs (printed circuit boards) are not a waste since they these can be used to manufacture other products.

ICA had highlighted the import issue for such capital machinery faced by various manufacturers and brands to promote mobile handset manufacturing.

With boom in the mobile handsets in India, the handset and component equipment manufacturing plants went from two in 2014 to 120 plus today. To increase cost efficiencies, the second machinery would be imported but until now needed permission from the said committee.

Companies started importing second hand machinery to keep pace with the rise in demand for handsets and also reduce the costs, which would come with first hand equipment.