New Delhi, Dec 10 (IANS): The recent increase in duty drawback for mobile phones to 3.9 per cent would boost the export of mobile phones from India, Indian Cellular and Electronics Association (ICEA) said here on Monday.

In its latest notification on duty drawbacks issued on December 6, the government increased the rate of duty drawback on mobile phones, both with or without accessories, to 3.9 per cent from the current rate of 1 per cent.

"The increase in the duty drawback rate would help in improving exports and in setting up further mobile phones and component industries," ICEA said in a statement.

ICEA Chairman Pankaj Mohindroo said: "The all industry rate (AIR) of 3.9 per cent is yet another move which cements our momentum to build India as a global mobile phone manufacturing destination."

Embedded disabilities because of import duties instituted in the Phased Manufacturing Programme will be mitigated and the exporters will have a total headroom of 7.9 per cent (including 4 per cent of Merchandise Exports from India Scheme), he added.

Mohindroo further said that after analysing the new rate and its implication on the industry, the ICEA might request for a review of the rate in three to six months.

Duty drawback is a refund in payments which were initially collected upon import of foreign-made goods. These payments could have been for customs duties, sales taxes, or other fees.

The latest revision would come into force on December 19, 2018, said the notification by the Department of Revenue.