Smartphone prices are expected to rise once again, especially in the Indian market. The information was confirmed this week by members of Prime Minister Narendra Modi’s government.
According to a report published by the Central Council on Indirect and Customs Taxes (CBIC), display sets (displays and other components) must have a 10% import tax.
In addition, a 5% additional fee will be charged about other chips and accessories imported together with the screen.
CBIC must charge 10% basic customs duty for the display, but if the company imports pins, antennas, buttons and other accessories, the fee will rise to 15%.
As the industry already works with a very tight margin in India, the price will certainly be passed on to the final consumer.
The Indian government’s change of position comes after the country’s revenue levied fines against Xiaomi, vivo and OPPO for alleged tax evasion. In their defense, the companies argue that the tax collection rules are confusing.
With the new measure, the Indian government wants to make everything more transparent, but there is now an internal debate over what counts as a “display set”.
The technology ministry considers that the screen assembly is made up of a touch panel, cover glass, gloss film, guide light or background LEDs, polarizers and a controller printed on a flexible circuit.
On the other hand, the industry claims that other parts are also part of the set, including even sensors and power buttons, for example.
It is worth remembering that the prices of smartphones and other electronic devices are already being pressured by high global inflation, and in India the dollar appreciation has also impacted at local prices.
As far away as it may seem, this increase in component prices in India could affect other markets. An example of this is that the iPhone assembled in the country is exported to North America, Europe and other parts of the world.
