Handset makers in India have asked the government in order to limit import duty on high-end phones exceeding Rs 20,000 to Rs 4,000 (as opposed to 20% of the import charge) in order to lower the grey marketing of high-priced devices as well as to lessen loss to the exchequer.
Apple on the other hand is going to be the key beneficiary if the government agree to take their request as most of the company imports iPhones are sold in India as well as all of its phone models are valued beyond the Rs 20,000.
In the approaching Union Budget, these alterations to the elementary customs duty on high-end devices may possibly recover Rs 1,100 crore for the exchequer as well as curb grey market phones by roughly Rs 5,000 crore, as per to the association claim.
Last month, the Indian Cellular and Electronics Association (ICEA) said to the finance ministry in a note that, “There is significant duty and tax loss on high end phones. It is estimated that the grey market in high end phones is over Rs 8,000 crore per year. This translates into a loss of Rs 2,560 crore, of which basic customs duty (revenue) is Rs 1,600 crore,”
On the other hand, the left over part of the grey market can be restrained by off-putting the number of high-end mobile phones that every single customers can bring from out of the country under the baggage allowance, but later it suggested that even though it is applied that may possibly lead to some inconvenience to the customer.
This is only appropriate and can only be done at selective airports for carefully chosen destinations, like Middle East, Hong Kong as well as Singapore.
Though in India, a large number of handset companies make mobile phones that also comprises of high-end models, market analyst at International Data Corporation (IDC) India evaluate Apple nearly imports total of 95% of its portfolio it sells here.
They further added by saying that the duty on imports that are applied on these high- end phones especially iPhones have made it sold in India for at least 20% more costly than compared to the other markets such as Singapore, Hong Kong or the US.
Tarun Pathak who is the associate director at Counterpoint Research said, “If this (duty decrease) happens, very few brands will benefit from it, chief among them will be Apple. Most of the brands selling smartphones above Rs 20,000 make most of their phones in India. But it remains to be seen whether the benefit will be passed on to consumers, so that they get lower costing phones,”
At present, Apple manufacture quite a lot of models in India such as iPhone SE, 6, 6s as well as 7 in the partnership with the contract manufacturer Wistron out of Bengaluru.