The Government of India has increased import duty on many electronic items, including mobile phones, and TV sets. This move of the Government is aimed at generating more jobs and cut down import bill to curb budgetary deficit. As a part of the Prime Minister Modi’s flagship program “Make in India”, Government is planning to increase manufacturing base of the electronics goods industry.
This move by the Government will hit the sales of prominent brands in the market like Apple. Indian Smartphone market is believed to be around $10 billion plus. Rise in tax on mobile phones from 10% to 15% will make import of apple phones costlier. Apple iPhone’s market share in India is already dwindling and this will affect them further.
In last 3 years, production of mobile handsets has doubled and it is estimated at around 500 million sets. Tax hike by the government will help domestic industry to perform better. President of ICA (Indian Cellular Association), Pankaj Mohindroo, is very much optimistic about it. Today India is fastest growing mobile handset market in the world.
Counterpoint Research says about 80% of the mobile handsets sold in the country are manufactured locally. Associate Director of Counterpoint Research, Tarun Pathak says that this move of the Government will hit the companies which are heavily reliable on imports.
Currently, Samsung has assembling facility in India, and most of its models are assembled locally, while Apple imports most of models except Apple iPhone SE model. Apple wants to expand its operations in India and seeking some incentives and tax relief. However, Government Officials have not responded positively to the company. Apple will be required to change the strategy in India. Either they will have to assemble iPhone locally or increase the price of iPhone, since most of its devices are imported.
The notification from the Government says they have increased import tax on Video Cameras from current 10% to 15%. Also, import tax on TV Sets is doubled to make it 20%.
Ending October 2017, country’s goods import bill has touched to $256.4 billion (approx. Rs. 16,42,514 Crore), roughly 22% more compared to previous year.