India announced on Tuesday reduced customs duties on mobile phones and key parts significantly from 20 per cent to 15 per cent. This move is expected to benefit Apple directly, which still imports a portion of its high-end smartphones into the country. Presenting the annual budget, Finance Minister Nirmala Sitharaman stated that tax cut targets mobile phones, printed circuit board assemblies (PCBA), and mobile chargers, claiming it serves consumer interest. Currently, Apple imports roughly 10-12 per cent of its iPhones sold in India. Analyst Neil Shah of Counterpoint Research estimates the five per cent tax reduction could translate to annual savings of $35-50 million for Apple. Apple has increased its local production in India with the help of contract manufacturers like Foxconn and India's Tata Group. However, it still imports some of its high-end Pro and Pro Max iPhone models into the country. According to Shah, Apple will benefit directly from this move, especially for models where PCBAs are still being imported. This change will also reduce import duties for new market entrants, which could be a game-changer for them. While other manufacturers like Samsung will also benefit, the impact will be less significant since the majority of their smartphones are already locally made, as per a source familiar with the situation. Neither Apple nor Samsung responded immediately to requests for comment regarding the import duty reduction. It's worth noting that Apple currently holds only a six per cent share of the Indian smartphone market according to Counterpoint. India's deputy IT ministry has called for lower import taxes on mobile phones to compete with China and Vietnam in becoming a major smartphone export hub. The country must act quickly to attract global companies with reduced tariffs. Prime Minister Narendra Modi has been actively promoting India as a smartphone manufacturing hub. The nation's $24-billion local production scheme focuses on mobile phones, attracting companies like Apple, Xiaomi, Samsung, and Vivo to increase their local operations. Xiaomi has previously requested tariff reductions on sub-components like batteries, USB cables, and phone covers. Attribution: Reuters
