Tech market research body, Counterpoint does not predict a substantive decrease in the price of smartphones even after the reduction of basic custom duties.
Firms like Apple and Samsung, have localized a substantial portion of their supply chain to India, with the recent Economic Survey 2024 highlighting that 14 per cent of Apple’s global supply of iPhones is made in India. However, for luxury or “premium” phones retailed in India, Indians continue to pay a substantive markup.
To bolster domestic production, Finance Minister Nirmala Sitharaman announced a reduction in BCD (basic import duties) for mobile phones and chargers from the existing 20 per cent to 15 per cent.
This is in line with the demands of the smartphone industry. In March businessline had reported that the Indian Cellular and Electronics Association (ICEA) was lobbying to get the Finance Ministry to reduce the import duties on several components.
Explaining the likely impact of the reduction of duties on consumer, Tarun Pathak, Research Pathak at Counterpoint said, “We see limited impact of the reduction of duties on these components as most of them are already localized in India The reduction of BCD (Basic customs duties) on smartphones, chargers and PCBA will not have any major impact on the prices of smartphones.”
“We may expect a price cut of 1-2 per cent on an average from this move, however, this depends on OEMs if they want to pass this to the end consumer. In the lower price segments, we may not see this as in these price segments, the margins are very low.”
“However, on the overall electronics manufacturing, the government has focused on a very key area, which is upskilling. Announcements regarding upskilling shows the government intent to grow high-skilled labor force and will help the electronics manufacturing sector securing high-skilled local talent,” Pathak added.