The government has the raised custom duty on many electronic items, including mobile phones and TVs. The move is aimed at reducing imports and to promote domestic manufacturing. Pankaj Mohindroo, president of the Indian Cellular Association, said the move will help domestic manufacturers who are making about 500 million phones annually.
On mobile phones, the duty has been increased to 15 per cent from 10 per cent, which will increase the cost of importing phones impacting Apple's iPhone models.
Currently, Apple assembles iPhone SE models in India and imports rest of the models. The company had sought tax relief for manufacturing the iPhone in India last year, but the government is yet to take a final call on it.
Though it is not clear by exactly how much prices of the iPhone will go up after this move, experts tracking the sector said it would be marginal for people who are already buying high-end phones. Secondly, India is a very small market for Apple – it accounts for just around 2 per cent of their global sales. They may absorb the price increase.
Most companies manufacture in India now, due to the steep increase in imports of feature phones and evidence of dumping in India. Eight out of 10 phones sold in 2017 were made locally, according to data from Counterpoint Research.
As per a notification issued by the department of Revenue, under the Finance Ministry, duty on monitors and projectors has doubled to 20 per cent. Import tax on video cameras has increased to 15 percent from 10 percent; and that on television sets has doubles to 20 percent, as has the tax on microwave ovens. Customs duty on video recording equipment as well as TV cameras has increased to 15 per cent from 10 per cent; import duty on set top boxes has doubled to 20 per cent.
For push-button telephones or mobiles, duty has been raised to 15 per cent from nil. Water heaters and hair-dressing instruments now have double the duty at 20 per cent.
Goods import for India in the seven months ending in October increased by 22 percent to $256.4 billion from 2016. To reduce dependence on imports, the government had launched a Make-in-India program to increase manufacturing in the country.
Minister of electronics and IT, Ravi Shankar Prasad, had recently said about 95 mobile manufacturing factories have come up in India and India is becoming a big hub of electronics and mobile manufacturing.
Rise in duty
- Duty on monitors, projectors, water heaters and hair-dressing instruments doubles to 20%
- Import tax on video cameras goes up from 10% to 15%
- Tax on TVs, set-top boxes and microwave ovens doubles to 20%
