The central government has cut the import duty on some key parts used in the manufacture of mobile phones from 15 to 10 percent. According to a government notification issued on January 30, the import duty of various mechanical components made of combination of plastic and metal including battery enclosures, primary lenses, back covers, SIM sockets etc. has been reduced. However, the move is expected to benefit the smartphone sector in terms of production and exports. Similarly, the price of phones in the country may also decrease.
Earlier this month, Reuters reported, citing two government officials, that the central government was considering lowering import duties on key components used to make premium phones. The decision is expected to help companies like Apple and increase India’s opportunities to export mobile phones.
The report mentions that smartphone companies have demanded a duty cut of around 12 factors to reduce the cost of manufacturing smartphones in India and create a more competitive environment against neighboring countries like China and Vietnam.
Meanwhile, the Global Trade Research Initiative (GTRI) has come out against the reduction of import duty on electronic components used in smartphone manufacturing. They warned that any change in the current tariff structure would adversely affect local production. GTRI noted that maintaining the current rates would be beneficial to balance industry growth and promote long-term development in India’s burgeoning smartphone market.
The think tank added that Indian manufacturers should “pay” duties on smartphones sold in India, but exports should be exempt from such duties.
Meanwhile, the India Cellular and Electronics Association (ICEA) has called for a cut in import duty on mobile phone components to boost domestic production and exports of handsets and support indigenous manufacturing.