Government Slashes Import Duty on Select Phone Parts to 10 Percent, Providing a Boost for Apple and Xiaomi

Import Duty Slashed on Various Phone Components Including Battery Covers, Main Camera Lenses, Back Covers, GSM Antennas, and Other Plastic and Metal Mechanical Items.

Indian government has cut the import duty on some parts used in making mobile phones to 10 percent from 15 percent, a move benefiting companies like Apple and Xiaomi that manufacture in Asia’s third-largest economy.

The import duty on parts such as battery covers, main camera lenses, back covers, other mechanical items of plastic and metal, GSM antenna, and other parts, has been reduced to 10 percent, the finance ministry said in a notification late on Tuesday.

The import duty on inputs used to manufacture these components has been cut to zero, the notification said.

Prime Minister Narendra Modi has in recent years promoted India as a smartphone manufacturing hub, prompting companies such as Apple, Xiaomi, Samsung Electronics and Vivo to expand assembly of phones.

However, duties on mobile phone parts were the highest among six comparable manufacturing nations, including China, Vietnam, Mexico, and Thailand, which led the industry to push for tax reductions.

“Duty cuts on import of mobile phone parts would help big global manufacturers to set up large scale mobile assembly lines in India, and substantially increase exports of mobile phones,” said Rajat Mohan, a director at tax consultancy firm MOORE Singhi.

Earlier this month, Reuters reported that India was contemplating reducing import duties on critical components essential for high-end mobile phone production.

This initiative, as stated by the India Cellular and Electronics Association (ICEA), is expected to enhance the competitiveness of mobile phone manufacturing in India.

As a result of global mobile companies establishing manufacturing operations in India, mobile phone exports from the country witnessed a year-on-year doubling to $11.1 billion (approximately Rs. 92,174 crore) in the fiscal year ending March 2023. Industry estimates project a further increase to $15 billion (roughly Rs. 1,24,560 crore) in the current fiscal year.