India cuts import tariffs on mobile phone parts to attract more local manufacturing of iPhones and more

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India is reducing import taxes on various mobile device components to Increasing smartphone production would be a boon for companies such as Apple Inc that are increasingly looking to India as a global manufacturing base.

Indian Prime Minister Narendra Modi’s government announced that it will reduce tariffs on plastic and metal mechanical parts, SIM card holders, screws and other components. For example, the tax on battery covers, front covers, antennas, SIM card holders, screws, conductive cloth and LCD screen conductive foam has been reduced from 15% to 10%.

Modi is trying to turn India into an electronics manufacturing powerhouse, attracting global brands such as Apple to move their supply chains out of China. At the same time, he is trying to build India's domestic supplier ecosystem to ensure that India captures a larger part of the value chain, not just the assembly location.

Indian Cellular and Electronics Association (ICEA) Chairman Pankaj Mohindroo said in a statement: "This is an important and welcome policy taken by the government to enhance the competitiveness of mobile manufacturing in India. Intervention. Scaling up and taking advantage of low input tariffs are key to transforming India into a global hub for electronics manufacturing and exports. The lobby group includes Apple, suppliers Foxconn and Pegatron as well as local companies. Contract manufacturer Dixon Technologies, the group said last month that higher tariffs would lead to a loss of up to 7% in India's cost competitiveness.

Modi’s project has had some early success, with Apple among the companies boosting production in the country. India currently accounts for more than 7% of global iPhone production.

As tensions between China and the United States continue to escalate, Apple is exploring ways to reduce its dependence on China. Its longtime partner makes most of the world's iPhones at its massive factory in China but has rapidly added assembly lines in India over the past few years.

Lower import duties will make assembly more cost-effective and may encourage manufacturers to increasingly produce devices for export as domestic smartphone consumption slows in India. In the fiscal year ending March 2023, India’s smartphone exports doubled to about $11 billion.

Navkendar Singh, an analyst at research firm IDC, said: "This scale will push more component manufacturers to set up factories locally, thereby enhancing India's ambition to become the world's factory."

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