Budget 2024: Imported Smartphones to Get Cheaper with 5% Customs Duty Reduction: Consumers might save between Rs. 7,000 and Rs. 15,000 on imported smartphones like the Google Pixel or high-end iPhone Pro models, thanks to the budget's reduction of basic customs duty on mobile phones from 20% to 15%.

Experts predict that the cost of these high-end smartphones will decrease by 5.0-5.5% if brands transfer the benefit of the reduced duty to consumers. India imports around $1 billion worth of these phones annually, with 98% coming from China. The duty cut will not affect the prices of locally made devices.

Currently, imported smartphones in India attract an 18% GST and a 22% customs duty (20% basic and 2% surcharge). The surcharge, which is 10% of the basic customs duty, will remain. With the reduction, the total customs duty is now 16.5% (15% basic and 1.5% surcharge). Locally manufactured phones are only subject to the 18% GST.

Ashwini Vaishnaw, Minister for Electronics and Information Technology, stated that the rationalization of customs duty on mobile phones, chargers, and other electronic components will help develop the mobile component ecosystem. He added that the success seen in mobile manufacturing will likely extend to the server and laptop manufacturing industries as well.

Apple imports its iPhone Pro and Pro Max models, while its other smartphones are made in India. Google imports its Pixel phones, and Samsung occasionally sources some high-end Galaxy devices from factories abroad.

Presently, 99% of mobile phones sold in India are manufactured locally. The budget also exempts duties on critical minerals needed for making components.

In addition to reducing the price of imported smartphones, the duty cut is expected to curb smuggling of high-end phones, experts noted.

"Import of mobile phones is shrinking, with only around 1% of devices being imported. The high customs duty of 22% has led to smuggling, which will definitely decrease with the new duty reduction," said Pankaj Mohindroo, chairman of the India Cellular and Electronics Association (ICEA).

According to an ICEA representation to the government in 2023, 80% of high-end phones were being smuggled into India. This smuggling results in the government losing out on both customs duty and GST revenue.

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