India could see increased manufacturing of iPhones and other high-end phones after tax cuts on imported parts

India expects to manufacture more cellphones this year after the government scrapped import duties on some components used to assemble high-end phones from global firms such as Apple, Reuters said on Friday. a tax official.

India’s mobile phone exports nearly doubled year-on-year to $5 billion (about Rs 40,960 crore) between April and October 2022, mainly supported by the government’s key program to offer incentives to local manufacturers.

On Wednesday, in the 2023/24 annual budget, Finance Minister Nirmala Sitharaman scrapped 2.5% tariffs on parts of camera cellphones.

“The duty structure now encourages them (phone makers) to import parts and assemble them here,” V. Rama Mathew, a member of India’s Central Board of Excise and Customs, said in an interview.

“The duty changes will benefit all telephony sectors. But they will also benefit the high-end telephony sector, because if you see the cost of the components, the camera assembly contributes substantially to that,” said said Mathew.

The move comes as Apple aims to increase its share of phones produced in India to 25%. India’s apple exports hit $1 billion (about Rs 8,190 crore) in December.

The Cupertino, Calif.-based company has been betting big on India since it started assembling iPhones in the country in 2017 through Wistron and then Foxconn, in line with the Indian government’s drive to manufacture locally.

Foxconn plans to quadruple the workforce at its iPhone plant in India over two years, sources told Reuters late last year.

JP Morgan analysts have estimated that a quarter of all Apple products will be made outside of China by 2025, up from 5% currently.

© Thomson Reuters 2023