If the COVID-19 and the hikes in smartphone prices were already not enough, the Indian government, today, introduced 10% duty hike on display panels which is bound to increase the selling cost of phones until it reaches the end consumer.
This move is due to the Atmanirbhar Bharat initiative by the Indian government which will affect everyone from smartphone manufacturers like OPPO, Vivo, Xiaomi, Samsung, and Realme to the buyers. The actual impactof the duty comes at 11% due to an additional cess.
Companies have said that the price hike could range between 1.55 to 5% and the demand is bound to be hit due to this, ahead of the festive season, as sources told Times of India. Sources also said that the government thinks this is the “right time” to impose a duty and embrace phased-manufacturing programme for mobile phones.
To give you an insight into how this might affect smartphone sales, smartphone displays cost around 15-25% of the phone’s price depending on the panel’s quality. A 10% increase would mean the price will go up significantly; a phone worth Rs 25,000 might cost Rs 27,000 after the increase in price.
This policy was all set to affect smartphones in April itself but, the government allotted more time for the companies to settle and start making displays in India. Currently, there are four companies that manufacture displays in India two of whose name is TCL and Holitech.
Some manufacturers said that the prices can go up immediately while some of them are trying to absorb the damage that can be caused by this impact. One of the other reasons why the government is trying to milk out money from both manufacturers and customers could be due to the Coronavirus pandemic.