Could the new import cuts on phone parts in India lead to cheaper budget phones?
NEW DELHI: India has cut import duties on some parts used to make mobile phones to 10 percent from 15 percent, benefiting companies such as Apple and Xiaomi, which manufacture in Asia’s third-largest economy.
The import duty on parts such as battery covers, main camera lenses, back covers, other plastic and metal mechanical items, GSM antenna and other parts has been reduced to 10%, the finance ministry announced late on Tuesday.
Import duties on inputs used to manufacture these components have been cut to zero, the announcement said.
In recent years, Prime Minister Narendra Modi has promoted India as a smartphone manufacturing hub, prompting companies such as Apple, Xiaomi, Samsung Electronics and Vivo to expand their phone lineups.
However, tariffs on mobile phone parts were the highest among six comparable manufacturing countries, including China, Vietnam, Mexico and Thailand, prompting industry calls for tax cuts.
“Cuts in import duty on mobile phone parts would help major global manufacturers to set up large mobile phone assembly lines in India and significantly increase mobile phone exports,” said Rajat Mohan, director of tax consultancy MOORE Singh.
Earlier this month, Reuters reported that India is considering lowering import duties on key components for making high-end mobile phones.
The move will make India’s mobile phone manufacturing more competitive, the India Cellular and Electronics Association (ICEA) said in a statement.
With global handset companies manufacturing in India, handset exports from the country doubled year-on-year to $11.1 billion in the fiscal year ending March 2023, and are expected to reach $15 billion in the current fiscal year, according to industry estimates.
