In a significant move towards curtailing the prices of mobile phones, the Finance Ministry has slashed import duties by 5 per cent on various components required for mobile handsets.
As per the Finance Ministry notification yesterday, duty has been lowered on components such as battery cover, front cover, middle cover, main lens, back cover, GSM Antenna/Antenna of any technology, PU case/Sealing Gasket – Other articles of Polyurethane foam like sealing gaskets/case, sealing gaskets/ cases from PE, PP, EPS, PC and all other individual polymers or combination/combinations of polymers, SIM socket, screw and side key for use in manufacture of cellular mobile phones beside others.
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These components will now attract import duty at 10 per cent as against 15 per cent . However, the notification has not specified any date for implementing lower duty.
According to the industry body India Cellular and Electronics Association (ICEA), import duties on mobile phone components in India, such as camera modules and chargers, currently range from 2.5 per cent to 20 per cent.
India levies the highest tax among six comparable manufacturing nations, including China, Vietnam, Mexico, and Thailand. “Unless they are lowered, India’s mobile phone exports growth could slow down,” it said.
It is worth highlighting that several companies had been pushing for duty cuts on over a dozen components, to reduce the cost of making mobile phones in India. The companies said that it would level the playing field with competitors like China and Vietnam.
The exports of mobile phones doubled in 2022-23 to USD 11.1 billion as compared to 2021-22. As per a recent report by Reuters, the industry expects exports in 2023-24 to rise to USD15 billion. As of August, the number has already touched USD 5.5 billion.
Apart from Apple, mobile phone exporters in India include South Korea’s Samsung and China-based Xiaomi. Apple iPhones are currently assembled in India. Soon, the company may also start producing iPad and AirPods here, to move away from China.
