India’s Import Tax Rises on Phones, Increasing Apple costs

India is aiming to help restrict supplies from overseas and build up the domestic industry by increasing the import tax from 10%-15% on dozens of electronic products that include mobile phones and television sets. Imports of phones that include Apple’s iPhone models will be super expensive as revenue will slow down in India’s $10 billion smartphone market. Prime Minister of the country has introduced a flagship “Make-in-India” program to expand the domestic industrial base. This tax increase will definitely boost domestic manufacturers who are already producing up to 500 million phones a year which is more than double the production 3 years ago.

Currently, Apple only assembles their iPhoneSE models in India and has been making increasing efforts to propose incentives and get out of the tax increase to expand manufacturing in that country. However, government officials have made it clear to not make any exemptions for the phone manufacturer. Apple imports 88% of their devices into India and the tax increase will either lead to a jump in iPhone prices or force the company to start assembling more in that country.

Tarun Pathak, an associate director at Counterpoint Research, said “It will impact Apple the most as the company imports 88 percent of its devices into India.” “Either this will lead to increase in iPhone prices or force Apple to start assembling more in India.”

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