In his Budget speech, Finance Minister P Chidambaram said, "Excise duty of one per cent, called National Calamity Contingent Duty, is now imposed on polyester filament yarn, which is the only yarn suffering this excise duty. I propose to remove that duty and shift the levy to cellular mobile phones."

"It will definitely increase the prices of mobile phones," LG Business Group Head (GSM) Anil Arora told media when asked about the impact of the proposed move.

The proposal may translate into a corresponding one per cent hike in price of mobile handsets. However, a full impact of this needs to be reviewed, a Nokia spokesperson said.