India imposes 10% tax for import of essential smartphone components

As per a recent government document, India has recently imposed a 10 percent tax on imports of key smartphone components including populated printed circuit boards (PCBs), which needs to be placed at the heart of smartphones. This moves to step up local assembly of mobile devices in the world’s second-biggest smartphone market.

To know more, the government’s move confirmed a report from last week that the country was exploring new duties on the imports of populated printed circuit boards that also included components such as processors, memory, and wireless chips.

With this, a 10 percent customs tax was also imposed on the imports of camera modules for phones and connectors.

This move, which is a part of a phased manufacturing plan for lifting local production of mobile devices, is focused on boosting Prime Minister Narendra Modi’s flagship ‘Make In India’ drive to turn the country into a manufacturing hub, similar to China.

smartphone-user

Back in February, the Union Budget 2018 announcement raised the customs duty on mobile phones from 15 percent to 20 percent. This announcement was aimed at increasing the local production of phones in India, as those devices do not come under this duty and can, therefore, be sold much more cheaply. The government first announced a duty of 10 percent in July 2017. Then, after just half a year was raised to 15 percent in December.

As per, the Counterpoint Research analysts, few brands, particularly in the premium space, are most likely to be affected by this decision. Apple was named, and sure enough, within a few days, the Cupertino giant raised the prices of several of its handsets. Other big brands have taken to assembling in India, such as SamsungHMD Global, and Xiaomi.

However, these new duties could, however, lead to protectionist outcries from several countries with China, Canada, and the United States. This, in turn, raised concerns at the World Trade Organization about India’s imposition of duties on such devices.