India has increased the import tax on dozens of electronic products like mobile phones and television sets, a government statement said, to help curb supplies from overseas and also build up the domestic industry.
The rise in earnings from 10 percent to 15 percent on handsets will create imports of phones – including most of Apple’s iPhone models – costlier at a time the company’s revenue growth is slowing in India’s $10 billion (roughly Rs. 64,054 crores) smartphone marketplace.
Pankaj Mohindroo, president of the Indian Cellular Association, said on Friday the tax increase will boost domestic producers that are earning about 500 million cellphones a calendar year, over double the output three decades ago.
Eight out of 10 mobiles sold in 2017 are made everywhere, data from Counterpoint Research showed.
Samsung Electronics assembles in India most of these handsets it sells in the country.
Apple currently only assembles its iPhone SE versions in India and imports its own others. The business has searched a selection of incentives and tax relief in the government in order for it to expand its manufacturing in India, but government officials have said that they are unlikely to make exemptions for Apple.
Tarun Pathak, an associate manager at Counterpoint Research, said the administration’s new tax notification, announced late on Thursday, will affect mobile phones companies heavily determined by imports.
“It will affect Apple the most since the company imports 88 percent of its own devices into India,” he explained. “Either this will cause increase in iPhone costs or force Apple to start building more in India.”
Aside from cellphones, the authorities also raised the import tax on movie cameras to 15 percent from 10 per cent and dropped the one on television sets 20 percentage, its statement said.
On Monday, a delegation of Indian telecoms gear manufacturers met Finance Minister Arun Jaitley, seeking government aid to advertise the domestic industry while he prepares the budget for 2018/19.
India’s goods imports in the seven months ending October rose 22 percent to $256.4 billion (roughly Rs. 16,42,514 crores) from a year earlier, increasing concerns among policymakers.