Smartphones are going to get even more expensive in India from this year after finance minister Nirmala Sitharaman presented the annual budget in Parliament today. The country will be introducing import duties on mobile parts to encourage local manufacturing which will go into effect from April 2021. 

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“Domestic electronic manufacturing has grown rapidly. We are now exporting items like mobiles and chargers. For greater domestic value addition, we are withdrawing a few exemptions on parts of chargers and sub-parts of mobiles. Further, some parts of mobiles will move from ‘nil’ rate to a moderate 2.5%” the finance minister said. 

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The new import duties will be levied on parts such as camera modules, PCBs (printed circuit boards), connectors amongst others from April onwards. The government will also be imposing an increased tax on importing of parts for chargers. While the government is going to be increasing taxes on chargers that are bundled with smartphones, many companies like Apple, Xiaomi and Samsung have opted to not bundle a charger in the box of its latest smartphones.

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Having said that, most new smartphones have adopted the PD charging protocol which means it will be easier for customers to switch to third-party chargers from companies like AMX, Anker, Stuffcool amongst others. However, the duty hike might have been imposed for a similar reason i.e. encourage manufacturing for chargers in India. It is worth pointing out some of these components were exempt from import duties prior to the annual budget change made today. 

Needless to say, prices of smartphones are bound to increase as other key components will still attract the higher import duty. However, India has seen a surge in local manufacturers that supply some of these components to smartphone OEM companies. The Finance Minister also said that the country will be investing Rs 1.97 lakh crores over the next five years to boost manufacturing via the Production Linked Incentive (PLI) scheme.

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