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Apple worried as Import duties on Mobile Phones raised by Government

Apple worried as Import duties on Mobile Phones raised by Government

New Delhi: To discourage imports from overseas and give boost to the domestic industry, the government has increased the import tax on dozens of electronic products such as mobile phones and television sets. The step comes in the wake of PM Modi’s ambitious programme Make-in-India to expand the industrial base.

Also, India’s imports rose to 22 percent to $256.4 billion (roughly Rs. 16, 42,514 crores) in seven months ending October. This has raised concerns among policy makers.

This move is expected to increase the cost of imported phones including Apple’s iPhone models whose revenue growth is slowing in India’s $10 billion (roughly Rs. 64,054 crores) smartphone market. The rise in tax would range from 10 percent to 15 percent.

“The tax hike will boost domestic manufacturers who are making about 500 million cellphones a year, more than double the output three years ago” said Pankaj Mohindroo, president of the Indian Cellular Association.

Data from Counterpoint Research showed that Eight out of 10 phones sold in 2017 have been made locally.

A brief information: Apple currently only assembles its iPhone SE models in India and imports its others. The company has sought a range of incentives and tax relief from the government for it to expand its manufacturing in India, but government officials have said they are unlikely to make exemptions for Apple.

On the other hand, Samsung Electronics assembles most of the handsets in India and sells in the country.

The latest move by the government, “It will impact Apple the most as the company imports 88 percent of its devices into India,” says Tarun Pathak, an associate director at Counterpoint Research. He further added that “Either this will lead to increase in iPhone prices or force Apple to start assembling more in India.