Why customs duty change may be a good news Apple, Samsung

Finance minister Nirmala Sitharaman announced in the Union Budget speech that the central government will exempt customs duty on imports of certain parts that are used in smartphones and remove the 2.5% customs duty on select parts of mobile camera phones. Following the announcement, a tax official has said that the move is likely to help smartphone companies like Apple and Samsung who are assembling high-end phones in India.
“The duty structure now encourages them (phone manufacturers) to import parts and assemble here. The duty changes will benefit all phone sectors. But it will also benefit the premium phone sector because if you see the cost of components, camera assembly contributes substantially,” told V Rama Mathew, member of India’s Central Board of Indirect Taxes and Customs, to news agency Reuters.

India saw increase in mobile production
The FM said that mobile phone manufacturing in India increased from 5.8 units in 2014-15 to 31 crore units valued at in 2022-23 financial year. “As a result of the various initiatives of the government, including phased manufacturing programs, mobile production in India increased from 5.8 crore units valued at Rs 18,900 crore in 2014-15 to 31 crore units valued at Rs 2,75,000 crore in the last financial year,” Sitharaman said.
Apple boosts iPhone production in India
The year 2022 has been a landmark year for iPhone assembling in India. As the company for the first time ever started manufacturing its latest-generation iPhones, iPhone 14, in India soon after its launch. Apple’s India manufacturing story goes back to 2017. iPhone SE (first-generation) is the first phone that the company started manufacturing in India at the Wistron plant in Karnataka. Since then India has been a part of Apple’s assembly line, but never for the latest-generation iPhones till the year 2022.

Recently, minister of commerce and industry Piyush Goyal called Apple “another success story” and said that the Cupertino-based company is looking to manufacture 25% of all of its iPhones in India. “They’re [Apple] already at about 5-7% of their manufacturing in India. If I am not mistaken, they are targeting to go up to 25% of their manufacturing,” Goyal said. In fact, Telecom and IT Minister Ashwini Vaishnaw said in November that the biggest unit to manufacture Apple iPhone in India will come up at Hosur near Bengaluru.
Samsung Galaxy S23 to be made in India
Samsung recently announced that all the smartphones of its latest flagship smartphone series — Galaxy S23 – that will be sold in India will be manufactured at the company’s Noida plant. Samsung inaugurated its largest mobile plant in Noida in the year 2018. Since then, several high-end phones have been assembled at the plant, starting with Samsung Galaxy S9 and Galaxy Note 9 series of smartphones.