Why Imported Phones Are Inexpensive After Union Budget?

Finance Minister Nirmala Sitharaman has reduced customs duty on mobile phones and their components in her Union Budget 2024-25, a move that may bring down prices of imported handsets. The announcement was made as part of the Union Budget for the financial year 2024-25.

“For consumers interest, we now propose to reduce basic customs duty on mobile phones, mobile PCBAs, and mobile chargers to 15 percent,” she said. Earlier it was 20 percent, the discount is expected to benefit companies like Apple that import the latest iPhone Pro models.

Industry experts expect the move to lead to a ₹2,000- ₹4,000 cut in prices of premium handsets such as the iPhone Pro and Google Pixel. The lessen customs duty will benefit companies importing completely built units (CBU) or populated PCBA (Printed Circuit Board Assembly) or chargers.

Custom duty reduction is expected to be the main beneficiary of the Apple Imported Pro Series model. Due to revised taxes, they expect to save around 250–418 crore.

According to Neil Shaw, VP for research at Counterpoint Research, the 5% reduction in customs duty allows Apple to pass on benefits to consumers or channels. Shah said, “The traders who import phones from Apple can save 5% with benefit, especially the Pro series models, as well as new sellers like Honor, Google, or OnePlus who import premium devices at launch.”

The move is a boost to the Indian mobile phone industry, which has matured significantly in the last six years with a three-fold increase in domestic production and a 100-fold increase in exports.

Industry experts also expect the move to lead to price rationalization in the 5G phone segment, especially in the ₹7,000–₹24,000 value-for-money segment.

Finance Minister’s plan to boost the Indian economy with the reduction in customs duty of mobiles and their components is part of a series of measures in the budget. Other measures include reducing customs duty on gold, silver, leather goods, and fish and increasing customs duty on ammonium nitrate and non-biodegradable plastics.