India mulls customs duty cuts on cell phone parts
India is looking to reduce customs duties on parts that are essential to making high-end smartphones. This could boost the nation’s exports and companies like Apple, government officials told Reuters on condition of anonymity.
To lower the cost of manufacturing smartphones in India and level the playing field with regional rivals like China and Vietnam, companies in the sector have been pushing for cuts on nearly a dozen components. The proposal includes parts, such as camera parts for high-end phones, another source said.
The industry body, India Cellular and Electronics Association (ICEA) stated that customs duties on mobile phone components, like chargers and camera modules, where the industry is seeking reductions, currently range from 2.5 per cent to 20 per cent.
According to an official, India’s Ministry of Electronics and Information Technology is solidifying the proposal, including the extent of the duty reductions, in the hopes that it will be incorporated into the national budget on February 1. The quantity of components included in the ministry’s proposal was unclear.
The sources added that the finance ministry will decide on the cuts when it completes the budget.
Industry figures show that those kinds of exports more than doubled to $11.1 billion in FY22/23 compared to the previous year, aided by government incentives to support regional manufacturing. Moreover, the industry anticipates that exports will reach $15 billion in FY23/24.
A deputy minister of information technology stated that Apple may double or triple its investments in the country over the coming years, in addition to exports, and that the company aimed to increase its manufacturing in India to 25 per cent of its global total. These statements were made by the minister of trade in India last year.
To try to increase the number of high-end mobile phones assembled in India, Finance Minister Nirmala Sitharaman removed a 2.5 per cent customs duty on certain parts of smart phones in the annual budget for 2023–2024.
