India announces new import cuts for mobile phone parts, will this make cheap phones even cheaper?

NEW DELHI: India has cut import duties on some components used to make mobile phones from 15% to 10%, a move that will benefit companies such as Apple and Xiaomi that manufacture in Asia’s third-largest economy.

The Ministry of Finance said in a notice issued on Tuesday night that import tariffs on components such as battery covers, main camera lenses, back covers, other plastic and metal mechanical products, and GSM antennas have been reduced to 10%.

The notification said the import duty on inputs used in manufacturing these components has been reduced to zero.

In recent years, Indian Prime Minister Narendra Modi has established India as a smartphone manufacturing hub, prompting companies such as Apple, Xiaomi, Samsung Electronics and Vivo to expand mobile phone assembly.

However, tariffs on mobile phone components are the highest among six comparable manufacturing countries including China, Vietnam, Mexico and Thailand, prompting the industry to push for tax cuts.

“The reduction in import duties on mobile phone components will help large global manufacturers set up large-scale mobile phone assembly lines in India and significantly increase mobile phone exports,” said Rajat Mohan, director of tax consultancy MOORE Singhi. “

Earlier this month, Reuters reported that India was considering cutting import tariffs on key components that make high-end mobile phones.

The Indian Cellular and Electronics Association (ICEA) said in a statement that the move will make India’s mobile phone manufacturing industry more competitive.

With global mobile companies ramping up manufacturing in India, the country’s handset exports doubled year-on-year to $11.1 billion in the fiscal year ending March 2023, and are expected to rise to $15 billion this fiscal, according to industry estimates .

(This story has not been edited by News18 staff and is published from a Yonhap news agency feed – Reuters)