Customs duty on smartphones, TVs hiked; Apple among affected companies
The Ministry of Finance hiked basic customs duty on a dozen electronic items including mobile phones, television sets, projectors, and water heaters has been hiked. The move is expected to give a boost to domestic manufacturers, and at the same time affect manufacturers, like Apple, that import their inventories for sale in India.
Declared in a notification by the Ministry, the hike in import tax will promote Modi government's ambitious Make in India initiative.
The notification issued by Department of Revenue of the ministry, custom duty on push button telephones or mobile phones has been raised to 15 per cent, when none was charged before. Import duty on television sets has been raised to 15 per cent from the existing 10 per cent.
On the other hand, customs duty on monitors and projectors has been doubled to 20 per cent, as per the notification. Meanwhile, water heater and hair dressing instrument will duty has been doubled to 20 per cent. Customs duty on some other items like electric filament and discharge lamps has also been.
The rise in tax from 10 percent to 15 percent on handsets will make imports of phones - including most of Apple's iPhone models. The decision comes close on heels of company's slowest revenue growth in six years in India's $10 billion smartphone market.
"It will impact Apple the most as the company imports 88 percent of its devices into India," he said. "Either this will lead to increase in iPhone prices or force Apple to start assembling more in India."
(With agency inputs)