The Finance Ministry of India has opted to decrease the import duty on specific smartphone components to 10%. This decision aligns with India’s sustained expansion in smartphone exports globally. India has ascended to the 5th spot as a major electronics exporter worldwide, climbing from its previous 9th position. Notably, smartphones account for approximately 52% of these shipments.
This reduction in import duty on smartphone parts is anticipated to benefit companies like Apple and Xiaomi, which undertake smartphone assembly operations within India. Original Equipment Manufacturers (OEMs) may opt to extend these benefits to consumers.
Smartphone Prices May Decrease by 3% – 5%
As per an official notification from the Finance Ministry, import duties for various smartphone components have been decreased from 15% to 10%. These components encompass items such as the battery cover, front cover, middle cover, main lens, back cover, GSM Antenna/ Antenna of any technology, PU case/ Sealing Gasket, among others.
Furthermore, this reduction applies to additional articles including Polyurethane foam items like sealing gaskets/cases, sealing gaskets/cases made from PE, PP, EPS, PC, and all other individual polymers or combinations of polymers, SIM socket, screws, and other mechanical items made of plastic or metal.
It’s noteworthy that the import duty on materials used in manufacturing the aforementioned components has been reduced to zero in India. Analysts speculate that this move could potentially lower phone prices by up to 5%, particularly in the entry-level and budget segments. This adjustment comes as a welcomed change, especially considering the recent trend of budget smartphones becoming more expensive in India.
In an effort to encourage local smartphone manufacturing, the Indian government had previously implemented a 15% customs duty in 2019. Now, the government has eased duties on some of these components to 10%. Major global players such as Foxconn, Apple, and Samsung have already established manufacturing units in India, and this decision is expected to incentivize more OEMs to manufacture their smartphones locally.
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