Government Cuts Import Duty on Some Phone Parts to 10 Percent in Boost for Apple, Xiaomi

Government Cuts Import Duty on Some Phone Parts to 10 Percent in Boost for Apple, Xiaomi

Indian government has cut the import duty on some parts used in making mobile phones to 10 percent from 15 percent, a move benefiting companies like Apple and Xiaomi that manufacture in Asia’s third-largest economy.

The import duty on parts such as battery covers, main camera lenses, back covers, other mechanical items of plastic and metal, GSM antenna, and other parts, has been reduced to 10 percent, the finance ministry said in a notification late on Tuesday.

The import duty on inputs used to manufacture these components has been cut to zero, the notification said.

Prime Minister Narendra Modi has in recent years promoted India as a smartphone manufacturing hub, prompting companies such as Apple, Xiaomi, Samsung Electronics and Vivo to expand assembly of phones.

However, duties on mobile phone parts were the highest among six comparable manufacturing nations, including China, Vietnam, Mexico, and Thailand, which led the industry to push for tax reductions.

“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.

Earlier this month, Reuters reported that India was considering import duty cuts on key components for producing high-end mobile phones.

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

With global mobile companies manufacturing in India, mobile phone exports from the country doubled year-on-year to $11.1 billion (roughly Rs. 92,174 crore) in the fiscal year to March 2023 and are expected to rise to $15 billion (roughly Rs. 1,24,560 crore) in the current fiscal year, according to industry estimates.

© Thomson Reuters 2024

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