Smartphones Prices To Reduce With The Reduced Import Duty On Smartphone Components

India is the largest smartphone consumer country after China and has also seen growth in mobile phone exports. With the aim of making India a global hub for electronics manufacturing and exports, the Ministry of Finance announced the reduction of import duties on mobile phone components. The notification also mentioned that the materials used to manufacture these components will be exempt from all kinds of import duties. 

The changes were revealed on 30 January 2024 through a notification from the Ministry of Finance ahead of the upcoming 2024 Union Budget. The Government may lay out new policies to complement its decision to reduce import duties and help India strengthen its position in electronics manufacturing and exports. 

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Government To Reduce Import Duties On Smartphone Components From 15% To 10% Alongside Import Duty Exemption For Materials Used To Manufacture These Components

Xiaomi and Apple are known for manufacturing their smartphones in India, and with the new policies, they will be highly benefited. The changes will attract more brands to manufacture their smartphones in India and help in reducing the prices of smartphones. Commenting on the new policies, here is what Pankaj Mohindroo, Chairman of India Cellular and Electronics Association (ICEA), said:

The amendment is an important policy change toward export-led growth, ensuring policy consistency, and addressing competitiveness in manufacturing, which is a crucial victory for the mobile phone manufacturing industry in India. This is a critical and welcome policy intervention by the Government towards making mobile manufacturing competitive in India. Building scale, riding on low input tariffs is key to transforming India into a global hub for Electronics Manufacturing and Exports.

The smartphone components that will see a reduction in import duties are battery covers, mechanical items, back covers, and camera lenses. All the inputs used to manufacture the components will see a decrease to 0% in their import duties. Here is what Rajat Mohan, a director at tax consultancy firm MOORE Singhi, said about the new policies (via Reuters):

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.

According to industry estimates, India doubled its year-on-year mobile phone exports to $11.1 billion in the fiscal year ending March 2023, with another increase expected in the ongoing fiscal year. With the new policy, manufacturing and exports will have a huge boost in the upcoming years. Several smartphone manufacturers would like to manufacture and assemble their smartphones in India, which will benefit the local consumer by offering lower prices and helping improve exports.