Apple iPhones and other smartphones from various Chinese vendors will soon cost you more, as the Indian government is planning to slap a higher customs duty on imported mobile phones after switching to the Goods and Services tax (GST). The move will increase the price of imported smartphones by 5-10 percent.
According to a report by Economic Times, the Ministry of Electronics and Information Technology has taken a legal opinion from the Attorney General who said that imposing a duty on phones will not violate the International Technology Agreement (ITA). Under this agreement, the signatory countries allow duty-free imports of certain electronics products.
The move is in line with government’s ‘Make in India’ vision and will help in boosting local manufacturing, decreasing Chinese imports and will persuade companies like Apple to manufacture the smartphone in India. This will helps in job creation in this sector as well.
Manish Sharma, President, CEAMA, says that the move is a welcoming step towards smartphone industry in India. “It provides the necessary impetus at the same time motivates the local manufacturers to align themselves to government’s ‘Make in India’ vision. Furthermore, it will boost the sentiments of the local players and provide a level playing field for all the manufacturers within the segment. The industry awaits on such positive stimulants to continue under the GST regime as well,” he said.
Further, the government is likely to ward off certain exemptions that domestic handset makers enjoys such as no countervailing duty on imported electronic components after the GST law will come into force. The inter-ministerial committee is in an opinion that a zero customs duty will not help the case of manufacturing in the India. However, the government is considering to shield domestic manufacturing.
However, the prices of the smartphone will surely go up once the rule is implemented. Currently, Motorola, Vivo, Huawei etc has set up their manufacturing plant in India. Xiaomi recently added a secondary manufacturing unit India as well.
As per a report, about 30 percent of all smartphones sold in India are imported, which include Apple iPhones as well. Apple is planning to start the manufacturing plant in India and the Cupertino-based giant is asking several tax concessions in order to make in India. However, the government has denied the demand for the same.