Indian Government has imposed a 10% tax on imports of key smartphone components including populated printed circuit boards. The new move falls in line with the recent reports claiming that the Indian Govt was exploring new customs duties on such components.
The import duty applies to components such as memory and chips. The populated PCBs account for roughly half of a typical smartphone’s cost. The 10% import tax is also imposed on imports of camera modules for phones and connectors. The move comes from P.M Modi’s phased manufacturing programme (PMP) which was unveiled in 2016 to lift local production of mobile devices and promote ‘Make In India’ initiative.
Indian Govt is aiming to turn India into a manufacturing powerhouse like China. Back in February at the Union Budget 2018, Govt had raised the customs duty on mobile phones from 15% to 20%. This announcement was aimed at driving more local production of smartphones, as those devices do not come with import duty and hence can be sold for cheaply. The new move is likely to affect brands, especially in the premium space.