- Monday, March 03, 2025
Industry watchers believe that the latest budget proposals could result in a reduction of prices of some of the premium handsets
By: Shajil Kumar
IPHONE maker Apple is believed to be the biggest beneficiary of a 5 per cent reduction in import duty on mobile phones and the tech titan could save as much as $35-50 million, market experts have said.
Industry watchers also believe that the latest proposals could result in Rs 2,000-4,000 reduction in prices of some of the premium handsets, including iPhone Pro and Google Pixel, if the companies indeed decide to pass on the benefit of cut in levy to customers.
Apple imports all the high-end iPhone Pro models that it sells in India, while some other companies import their flagship devices for some period in small quantities and then make them locally.
An e-mail sent to Apple seeking comments did not elicit any response.
Finance Minister Nirmala Sitharaman, while presenting the Union Budget for fiscal year 2024-25 on Tuesday, proposed slashing import duty on mobile phones, chargers and some components that are used for manufacturing of handsets.
She said with a three-fold increase in domestic production and almost 100-fold jump in exports of mobile phones over the last six years, the Indian mobile phone industry has matured.
“In the interest of consumers, I now propose to reduce the BCD (basic customs duty) on mobile phone, mobile PCBA and mobile charger to 15 per cent,” Sitharaman said.
Earlier BCD on mobile phones, chargers and motherboards was 20 per cent.
Expert view
“For BCD on mobile and charger the 5 per cent saving will be mostly applicable to players which are still importing completely built units (CBU) or populated PCBA or chargers. For example, Apple imports Pro series models and Apple could save almost 5 per cent on the import price,” said Neil Shah, VP for Research, Counterpoint Research.
He said with this, Apple will have an opportunity to use this extra cushion to either pass on to the consumers or channels.
“The 5 per cent duty savings will benefit vendors which have been importing phones from Apple with Pro series models to some newer vendors such as Honor or brands such as Google or OnePlus importing premium devices initially at launch,” Shah said.
He further said that iPhone Pro price can be lower by Rs 3,000 to 4,000 and that of Google Pixel can come down by Rs 2,000-Rs 3,000 if these companies decide to pass on the benefit of tax cut to customers.
CyberMedia Research (CMR) VP – Industry Research Group (IRG) Prabhu Ram said that Apple is expected to be a prime beneficiary of the reduced customs duty on smartphone parts in India.
Techarc chief analyst and Founder Faisal Kawoosa said the proposal to reduce the BCD on mobile charges and mobile PCBA will further allow the smartphone value chain to work collaboratively towards making affordable 5G smartphones.
Kawoosa said that reducing BCD for imported category of phones neither aligns with any customer demand and they are happily paying even more than Rs 100,000.
“No consumer in that segment was really complaining about them being over-taxed,” he said.
Industry body ICEA said that it made the recommendation to reduce BCD on mobile phones, its PCBA and charger and adapter, which has been accepted. (PTI)
