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A 5% duty cut in imported mobile phones is likely to reduce the cost of high-end products such as Apple’s
iPhone Pro
and Google’s Pixel. The measure isn’t expected to impact most other devices as nearly 99% of mobile phones being made in India.
“With a three-fold increase in domestic production and almost 100-fold jump in exports of mobile phones over the last six years, the Indian mobile phone industry has matured.
In the interest of consumers, I propose to reduce the BCD (basic customs duty) on mobile phones, mobile PCBAs (printed circuit board assembly) and mobile chargers to 15%,” the FM said in the Budget speech. The duty, previously at 20%, was originally introduced to support local manufacturing of smartphones.
If companies decide to pass on the benefits, imported iPhone Pro models could get cheaper by Rs 3,000-4,000 and
Google Pixel
by Rs 2,000-3,000, Neil Shah, VP at CounterPoint said.
Shah said Apple may gain $30-50 million in import savings due to the measure. While Apple makes the bulk of its iPhone devices in India taking benefit of the production-linked incentive (PLI) scheme, the company still imports its Pro versions.
Google’s Pixel, which the company now wants to manufacture in India, is still being imported, though its market share remains very low.
Dixon chairman Sunil Vachani, who is also the president of Consumer Electronics and Appliances Manufacturers Association, said the reduction in
import duty
will not have any impact on local manufacturing. “The whole ecosystem is so strongly built in the country that we don’t see any threat from import of finished mobile phones. Also, there are the continuing benefits of PLI in India. We feel these factors should not result in a flood of imported smartphones,” Vachani said.
