India imposes import duty on smartphone components
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The Indian government has introduced a 10% import duty on key smartphone components as part of its ongoing efforts to stimulate local handset and component manufacturing.
The new duty covers PCBs, camera modules and connectors and is likely to increase prices of mobile phones for companies that do not source these components locally.
In February, the government introduced a 20% basic customs duty on imports of full mobile phones, as well as duties of between 5% and 20% on components including LCD panels, PCBs for chargers, lithium batteries and other components including keypads, battery packs and antennae.
The report notes that currently more than 80% of phones sold in India are assembled locally, and sales volumes for mobile phones made in India are projected to improve 55% this year. Major contract manufacturers including Foxconn, Wistron, Flex and several Chinese handset makers have established local manufacturing to reduce costs.
But Samsung remains the only major brand to locally assemble PCBs, which account for around half the cost of manufacturing a handset, prompting the government to attempt to stimulate market growth.
Questions & Answers
Q.What specific components are now subject to the new 10% import duty?
What specific components are now subject to the new 10% import duty?
The new 10% import duty applies to key smartphone components including PCBs, camera modules, and connectors. This measure is intended to encourage local manufacturing within India's smartphone industry.
Q.How might this new import duty affect the price of mobile phones in India?
How might this new import duty affect the price of mobile phones in India?
Mobile phone prices are likely to increase for companies that currently do not source these newly tariffed components locally. The duty aims to incentivise domestic production and reduce reliance on imports.
Q.Which major smartphone brand is currently noted for locally assembling PCBs in India?
Which major smartphone brand is currently noted for locally assembling PCBs in India?
Samsung is identified as the only major brand that currently assembles PCBs locally in India. PCBs are a significant component, accounting for approximately half the cost of manufacturing a handset.
Q.What was the previous import duty imposed on full mobile phones and other components earlier this year?
What was the previous import duty imposed on full mobile phones and other components earlier this year?
In February, the government introduced a 20% basic customs duty on full mobile phone imports. Duties ranging from 5% to 20% were also placed on components like LCD panels, lithium batteries, and PCBs for chargers.
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