In blow to Apple, govt hikes import duty on electronic goods
15 Dec 2017
The government of India has increased the import duty on dozens of electronic products such as mobile phones and television sets from 10 per cent to 15 per cent, in a bid to curb buoyant imports and support local manufacturing.
The hike in basic customs duty on handsets would hurt Apple most as it imports all of its products in whole or in parts.
The government's move comes at a time when the maker of iPhone and iPad is asking for more tax concessions from the government to make its investments in India pay.
The Modi government's 'Make in India' will make imports of mobile handsets, including most of Apple's iPhone models, more expensive.
The government's new tax will impact mobile phone makers heavily dependent on imports, Tarun Pathak, an associate director at Counterpoint Research, said.
''It will impact Apple the most as the company imports 88 percent of its devices into India,'' he said. ''Either this will lead to increase in iPhone prices or force Apple to start assembling more in India.''
However, the government's move would help Apple and other manufacturers make in India and maximise profits in India's $10-billion smartphone market.
Apple currently only assembles its iPhone SE models in India and imports all other models. Yet, the company has sought a range of incentives and tax relief from the government for it to operate in India.
Prime Minister Narendra Modi has launched a flagship Make-in-India program to expand the domestic industrial base, and one of the areas showing success is electronics.
The duty hike will boost domestic manufacturers who are making about 500 million cellphones a year, more than double the output in three years, according to Pankaj Mohindroo, president of the Indian Cellular Association.
Eight out of 10 phones sold in 2017 have been made locally, data from Counterpoint Research showed.
Aside from cellphones, the government also raised the import tax on video cameras to 15 per cent from 10 per cent and doubled import duty on television sets 20 per cent.
