Indian Government Increases Custom Duty on Mobile Phones to 20 Percent
Today in the Union Budget 2018 speech, the government raises customs duty on mobile phones from 15 percent to 20 percent. The custom duty on mobile phones was at 6 percent back in 2014, later increased to 10 percent in July, and to 15 percent in December. This increase of 5 percent in import tax will impact brands that are yet to establish their plants in India.
The motive behind the increase in import tax is to increase the local production of phones in India. Also to promote the creation of more jobs in the country and this will make the domestic items cheaper than imported items. As a result, will generate more demand thus creating more employment on a large scale. Though Apple’s Wistron Corp manufacturer is on the verge of closing a land deal, it will be while before everything takes shape. In the meantime, the new import tax is said to impact the current pricing.
On the other hand, even other OEMs will also be forced to start manufacturing/assembling more models in India, especially since India is now the second largest smartphone market in the world. With the rise of custom duty on parts of mobile phones such as printed circuit boards (PCBs), camera modules and connectors to 15 percent, companies that import components to India and assemble are also going to get hurt. While this seems like an intentional move to create jobs and promote ‘Make in India’ by bringing the supply chain to the country, it will also affect people who import.
At the Union Budget 2018, Finance Minister Arun Jaitley regarding the cryptocurrency clarified by saying “The Indian government will take all measures to eliminate the use of crypto-assets in financing illegitimate activities. The Government will also explore the use of blockchain technology for ushering in a digital economy.”
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