Budget 2022: A Booster Shot to Wearables and Hearables

My Mobile spoke to a few stakeholders and industry players to find out their opinion on what this move by the government would translate on the ground

The government has presented the Union Budget for the year 2022-23 and the speech of Finance Minister Nirmala Sitharaman has since February 1 triggered innumerable debates, discussion and analysis. Whether or not we give thumbs up or thumbs down to this year’s budget, we cannot ignore the fact that the Finance Minister’s speech did encapsulate the latest trends in spaces like wearable, hearable consumer electronics space etc. The speech categorically mentioned that “Customs duty rates have been calibrated to provide a greater rate structure to facilitate domestic manufacturing of wearable devices, heareable devices and electronic smart meters”, thereby hinting at the widespread implications of growth in the sector registered during the new normal.

We spoke to a few stakeholders and industry players to find out their opinion on what this move by the government would translate on the ground. When asked as to how the wearable makers look at this development, Arnav Kishore, the co-founder of one of India’s fastest growing smartwatch brands, Fire-Boltt, said, “We are happy that the government is paying attention to this massively growing segment and wants to aid domestic manufacturing. If the calibration of customs duty rates facilitates economical inflow of raw materials, we consider it a win-win proposition. If implemented effectively and taking into account the existing bottlenecks for homegrown brands, then the impact on the wearable sector would be exponential. While we would definitely witness a barrage of domestic manufacturers, the key for all brands would be to offer innovative features and premium quality.”

“We are happy that the government is paying attention to this massively growing segment and wants to aid domestic manufacturing. If the calibration of customs duty rates facilitates economical inflow of raw materials, we consider it a win-win proposition”

–          Arnav Kishore, Co-founder, Fire-Boltt

Elaborating on the factors that might have led the government to look into this burgeoning sunshine sector, he added, “The smartwatch market in India registered more than 450% YoY growth during Q3 2021 vis-à-vis Q3 2020. Also, the dominant players driving the growth were not established foreign brands but a few innovative homegrown brands, with Fire-Boltt registering the maximum growth rate. The period has been like what we saw years ago when mobile phones made their way in, and similarly it is here to stay for long. The government is witness to the same and could envision the future of wearables or consumer electronics per se. This combined with the health, fitness and lifestyle elements associated with smartwatches could be the factors that led the government to look into the sector.”

Also Read: Wearables: How Indian Brands Are Leading By Example

Lifestyle brand ZOOOK, which recently forayed into the wearable space but has been a leading player for long in audio, hearable and lifestyle electronics space, feels that the wearable market is exploding like never before and boosting domestic wearable and overall electronics technology would yield multifold benefits. “To boost Indian manufacturing, wearable is one of those segments where there is a scale and will encourage domestic manufacturing. The acknowledgement of this by the government in budget is a welcome development. Boosting domestic manufacturing in the sector would definitely generate a lot many jobs. Also, since wearable has scalability, it will further encourage electronic industry and tech companies to invest in India and bring technology to India,” said Achin Gupta, ZOOOK Country Head-India.

“Moves like customs duty concessions results in level playing field, thereby enabling the manufacturers to indulge in a healthy competition driven by innovation and R&D. Also, we definitely need PLI scheme as it will control the product cost while also making manufacturers competent enough to scale and export”

–          Achin Gupta, Country Head-India, ZOOOK

“This is definitely delayed but a very important step. India has to be self-reliant, and the country has got the potential to manufacture to feed local needs. A push from the policy makers is a boon also because it would further bridge the gap of our trade deficit. Moves like customs duty concessions results in level playing field, thereby enabling the manufacturers to indulge in a healthy competition driven by innovation and R&D. Also, we definitely need PLI scheme as it will control the product cost while also making manufacturers competent enough to scale and export,” he further said.

Echoing the sentiments of the development being a much-awaited yet welcome move, Komal Agarwal, the co-founder of homegrown smart wearable brand Pebble, said that by lowering the custom duty rates, the government has given a much-needed push to the domestic manufacturing market, especially in wearable space. “This move will help the industry be self-sufficient and less dependent on imports, which I feel will be the biggest impact. It has certainly given a breather to the electronics industry. It will indeed help to make wearable more affordable. The global electronic products market has surpassed $1 billion and is majorly China dependent. There is an opportunity for us to reduce this dependency and have a larger share in the manufacturing of electronic products globally.”

“This move will help the industry be self-sufficient and less dependent on imports, which I feel will be the biggest impact. It has certainly given a breather to the electronics industry. It will indeed help to make wearable more affordable”

–          Komal Agarwal, Co-founder, Pebble

Archit Agarwal, the co-founder of Indian consumer technology brand Crossbeats, however opined that even as boosting domestic manufacturing would definitely be the right way ahead, owing to the growth of smartwatches and TWS earbuds with active noise cancellation etc, but the key to long-term growth trajectory lies in focusing on innovation and developing products based on research and development. He said, “Nearly two third of the market is currently dominated by homegrown brands. It shows that there is immense scope of scalability in the sector and it would be a fruitful proposition for all stakeholders. If implemented effectively on ground zero, the policy of calibrating customs duty rates for facilitating domestic manufacturing can have major implications in the long run. While the increased manufacturing activities would result in more job opportunities as well as scalability, the pricing would also get positively impacted in the long run. Also, with manufacturing being done within the country, we would have a better control and scope of ensuring innovation. Coupled with thorough R&D, the results can be exceptional,” he added.

“The policy of calibrating customs duty rates for facilitating domestic manufacturing can have major implications in the long run. While the increased manufacturing activities would result in more job opportunities as well as scalability, the pricing would also get positively impacted in the long run”

–          Archit Agarwal, Co-founder, Crossbeats

Another company that has been a part of the evolving consumer electronics and lifestyle technology space in India for the past three decades, Quantum Hi-Tech feels that huge investment is expected to come into domestic manufacturing of wearable and audio products post the development. Arnav Mutneja, Director at Quantum Hi-Tech, said, “While huge investments will come into domestic manufacturing, the announcement by the Finance Minister would also expedite manufacturing for local consumption. With regard to the impact it’s going to have on the audio sector and on the overall electronics industry, a large portion of products will be made in India and expertise will come in along with a developed ecosystem.”

It is quite apparent that the sector looks at the recent budget announcements in a positive light. The concerns, however, remain on its implementation on the ground and how the opportunity would be availed by the stakeholders.

Also Read: The 5G Craze: How Consumers Are Looking For A Smartphone Beyond Cameras

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