India stands out as a key tech market and a central hub for tech companies, catering not just to sales but also production. Companies like Apple and Xiaomi manufacture their products within the country. The government is proactively enhancing its attractiveness for investments, offering diverse incentive packages. As of January 31, 2024, India has decreased the import duty on smartphone components from 15% to 10%, showcasing its commitment to fostering a favorable business environment. Here are the details…
India’s 10% Import Duty Sparks Surge in Smartphone Production
India has decreased the import duty on smartphone components from 15% to 10%, intending to boost smartphone manufacturing and reduce prices. As a result, companies manufacturing in India will now pay lower taxes on items like camera lenses, back covers, plastic and metal mechanical parts, GSM antennas, and other components imported from other countries.
This decision brought joy to major manufacturers, including Apple. While a drop from 15% to 10% may not appear substantial initially, it’s crucial to acknowledge that we’re dealing with operations valued in billions of dollars. The cost reduction could motivate current manufacturers like Apple, Samsung, Xiaomi, Oppo, Vivo, Realme, and OnePlus to boost their investments and inspire new ones to initiate production in India.
“Duty cuts on import of mobile phone parts would help big global manufacturers to set up large scale mobile assembly lines in India, and substantially increase exports of mobile phones,” said Rajat Mohan, a director at tax consultancy firm MOORE Singhi.
In 2022, Apple started making iPhones and AirPods at its factory in India, with a hefty $1 billion investment. Xiaomi, since 2014, runs five Indian factories, producing smartphones like Redmi, Mi, and POCO. Samsung, having started production in India back in 2007, operates six factories, making phones under brands like Galaxy, M, and A. This decision seems to be very beneficial for all these brands and many more.
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