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Presenting the annual budget for 2024/25 in parliament on
Tuesday, India's finance minister Nirmala Sitharaman said import
tax on mobile phones, printed circuit board assembly (PCBA) and
mobile chargers is in the "interest of consumers."
Almost 10-12% of the Apple iPhones are imported each year into
India and a 5% reduction in tax on the devices will result in a
$35-50 million annual benefit to Apple, said Neil Shah, a
co-founder at Hong Kong-based Counterpoint Research.
Although Apple has boosted its local production in India through
contract manufacturers such as Foxconn and India's Tata Group,
it still imports some of its high-end Pro and Pro Max iPhone
models into the country.
Apple "will directly benefit ... they (also) have some models
for which PCBAs are still being imported," said Shah.
The move will also "alleviate import duties for new players
entering the market. It's a gamechanger for them," he added.
Other manufacturers such as Samsung would also benefit, but to a
lesser degree as the majority of their smartphones are locally
made, said a source with direct knowledge of the matter.
Apple and Samsung did not immediately respond to a request for
comment.
Apple has a 6% share of India's smartphone market, according to
Counterpoint.
India's deputy IT ministry in January privately argued for a
reduction on import taxes on mobile phones, saying the country
risks losing out to China and Vietnam in the race to become a
major smartphone export hub and must "act fast" to lure global
companies with lower tariffs, Reuters has reported.
Prime Minister Narendra Modi has in recent years promoted India
as a smartphone manufacturing hub and the nation's $24-billion
local production scheme covers mobile phones, prompting
companies such as Apple, Xiaomi, Samsung and Vivo to expand
local operations.
China's Xiaomi has also in the past asked for tariff reductions
on sub-components used in batteries, USB cables and phone
covers.
(Reporting by Aditya Kalra and Munsif Vengattil, Editing by
Louise Heavens)
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