In an exciting development, the Indian government has decided to reduce import tax on several components used in manufacturing smartphones. Initially, the import duty stood at 15 percent. However, now, the center has decreased it to 10 percent. This will benefit brands manufacturing their units in the country, including India, and bring in more opportunities and developments in the future.
Import Duty Cut Applies On The Following Components
According to a report by the Economic Times, import duty has been decreased on components like battery covers, front covers, middle covers, primary camera lenses, back covers, antennas, and other polyethylene articles like sealing cases, etc. Basically, companies will now have to pay less import duty on several imported components made of metal and plastic, which should result in lower manufacturing costs.
Indian Smartphone Production Doubled In Fiscal Year 2023
The decision came after the India Cellular and Electronics Association suggested that import duty cuts could benefit global brands and make them manufacture in India, which, in turn, can increase domestic production by 28 percent to USD 82 billion. The decision comes at a time when big players like Apple are turning away from manufacturing their phones and other products in China to alternatives like Vietnam and India.
Most recently, the tally of iPhones manufactured in India rose to seven percent. In the near future, Apple can move more assembly lines in the country. Lower import tariffs will make assembling products more effective and encourage manufacturers to make products in the country and export them to other regions. Just last year, India’s smartphone exports doubled to USD 11 billion.
However, the Global Trade Research Initiative presented the other side. In its report, the organization suggested the government retain the import duties on components used in making smartphones as the current structure has proven successful. Further, the organization also mentioned how reduced rates could harm local manufacturing, which, at first glance, appears to be referring to the manufacturing lineups set up by local companies.