Government Cuts Import Duty on Smartphone Parts, Benefit for Apple, Xiaomi, Samsung

The central government has reduced the import duty on some parts used in smartphones from 15 percent to 10 percent. This will benefit smartphone companies manufacturing in the country. These include South Korea's smartphone Samsung, American devices maker Apple and China's Xiaomi.

In the notification issued by the Finance Ministry, it has been said that the import duty on battery cover, main camera lens, back cover, other mechanical items of plastic and metal, GSM antenna and other parts has been reduced to 10 percent. Import duty on inputs used in the manufacturing of these components has been reduced to zero.

In the last few years, Prime Minister Narendra Modi has promoted the country as a manufacturing hub for electronics, including smartphones. This has given incentives to companies like Apple, Xiaomi, Samsung and Vivo to increase the assembling of smartphones. Earlier this month, Reuters had reported that the government is considering reducing import duty on critical components used in making expensive smartphones. India Cellular and Electronics Association (ICEA) had said in a statement that this will boost the manufacturing of smartphones in the country.

In the last financial year, exports of smartphones from the country had doubled to $11.1 billion on a year-on-year basis. This is likely to increase to $15 billion in the current financial year. Last year, the Central Government had approved the Production-Linked Incentive (PLI) Scheme 2.0 with an incentive of Rs 17,000 crore to promote manufacturing of IT hardware like laptops and tablets in the country. It is expected to produce products like personal computers, servers, laptops and tablets worth about Rs 3.35 crore in six years. American company Apple, which has a major share in the premium smartphone market, has also planned to increase manufacturing in India. The company has prepared to shift a large part of its manufacturing in China to India. Last year, Apple also opened two retail stores in the country. HP, another big company making computer devices, has also partnered with technology company Google to make Chromebook laptops in the country.