India expects to produce more handsets this year after the government scrapped import tariffs on some components used to assemble high-end phones by global companies like Apple, a tax official told Reuters on Friday.
Indian mobile phone exports almost doubled year-on-year to US$5 billion (around Rs.40,960 billion) between April and October 2022, mainly supported by the government’s key program to incentivize local manufacturers.
At the annual budget For 2023/24, Finance Minister Nirmala Sitharaman abolished tariffs of 2.5 percent on selected parts of mobile camera phones on Wednesday.
“The customs structure now encourages them (phone makers) to import parts and assemble here,” V. Rama Mathew, a member of India’s Central Bureau of Indirect Taxes and Customs, said in an interview.
“The tariff changes will benefit all phone sectors. But it will also benefit the premium phone sector because when you see the cost of the components, the camera assembly contributes significantly to that,” Mathew said.
The move comes as Apple aims to increase its share of Indian-made phones to 25 percent. Apple Exports from India reached US$1 billion (about Rs.8,190 crore) in December.
The Cupertino, California-based company has relied heavily on India since assembly began iPhones in the country in 2017 about Wistronand later with Foxconn, in line with the Indian government’s push for local manufacturing.
Foxconn plans to quadruple the workforce at its iPhone factory in India over two years, sources told Reuters late last year.
Analysts at JP Morgan have estimated that a quarter of all Apple products will be made outside of China by 2025, up from 5 percent today.
© Thomson Reuters 2023
