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NEW DELHI: In a strategic move to promote domestically manufactured mobile phones and enhance India’s position in the global market, the Government of India has decided to reduce excise duty on basic consumption goods role in mobile phone manufacturing from 15% to 10%. The landmark decision announced on Tuesday came shortly before the Union Budget 2024.
The move will be a boon for high-end smartphone makers, especially as companies like Apple and other major Android phone makers are expected to benefit. The revised tariff applies to various components, including battery cover, front cover, main mirror, rear cover, GSM antenna, PU cases and other essential mobile phone accessories. Sources suggest that the government's motivation behind the decision is to boost India's export potential and promote the country as a hub for mobile phone manufacturing.
Lowering import duties is seen as a way to make smartphone manufacturing costs more competitive, in line with the industry’s demands with nearby competitors such as China and Vietnam. In India, the mobile phone manufacturer has advocated cutting tariffs on many products to reduce overall production costs. Import duties on essential goods, including cameras and chargers, previously ranged from 2.5% to 20%. The latter decision is expected to encourage more companies to invest in local manufacturing, increasing the country’s ability to invest in premium smartphones.
Apart from Apple, major players in the Indian mobile phone export market include Samsung of South Korea and Xiaomi of China. iPhones are currently being assembled in India, Apple is diversifying production away from China and exploring opportunities to expand its services to include the iPad and AirPods. The move is in line with the government’s recent efforts to promote the ‘Make in India’ initiative to create a favorable environment for high-tech manufacturing.
In the 2023-24 Budget, Finance Minister Nirmala Sitharaman had already waived customs duty of 2.5% on select components of mobile camera phones, aimed at promoting state-made high quality mobile phones of the has improved it's highlights more.