Indian Government Increases Import Taxes on Mobile Phones; A Move to Develop Domestic Industry

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The Indian Government has increased import taxes on electronic products such as mobile phones, television sets, digital cameras, etc. with an aim to reduces supplies from other countries and develop the domestic industry. A government statement saw by Reuters cites a 5% hike on imports of mobile phones, which badly hurts Apple more than anyone.


India is one among the top countries which import a lot of products from other countries. Numbers-wise, India's goods imports in the last seven months ending October 2017 is $256.4 billion, and it keeps on increasing. If we consider the same last year, India witnessed a 22% rise.

It is already a known matter that our Prime Minister Narendra Modi has been pushing the flagship 'Make in India' program very hard to develop the domestic industrial base. That said, one of the areas which show success for the Make in India program is electronics.

Pankaj Mohindroo, president of the Indian Cellular Association, said on Friday "the tax hike would boost domestic manufacturers who are making about 500 million cell phones a year, more than double the output three years ago."

A recent report from Counterpoint Research firm said that eight out of 10 phones sold in India in 2017 are locally made. With brands such as Xiaomi following the initiative of Make in India, it will be hard for Apple to sustain in the already struggling market. South Korean smartphone brand, Samsung is already assembling most of its smartphones which are being sold in India.

If you look at Cupertino giant Apple, it just started assembling the entry-level iPhone SE model in India, but other models including the high-end Apple iPhone X is being imported. Apple has been pushing very hard to get necessary permissions from the Indian government, but the officials are denying the company's requests.

“It will impact Apple the most as the company imports 88 percent of its devices into India. Either this will lead to increase in iPhone prices or force Apple to start assembling more in India,” Tarun Pathak, associate director at Counterpoint Research said on the new tax change.

Keeping the mobile phones aside, the new import tax rise also applies to video cameras, television sets. The tax rise for video cameras is 5%, which takes into 15% from the previous 10%, whereas in the case of television sets, the new import tax rise is 20%.

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Chakri is a go-to guy for your next smartphone recommendation. Back in his engineering days, he used to play with smartphones by installing custom ROMs and that passion got him into the tech industry. He still goes nuts about a smartphone knocking his door for review. Currently managing everything at Telecom Talk, Chakri is trying to master PUBG Mobile in his free time.

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