Originally decided to be effective this month, the Indian government has officially postponed the tax on the imports of touch panels that would have affected smartphone brands like Apple and Samsung big time.
Under PM Narendra Modi’s “Make in India” Campaign, the government has been gradually increasing import taxes on smartphone component as an incentive for big players of the industry to set-up local manufacturing. Apple and other members of the cellular and Electronics Association used their influence to argue that touch panel tax and other government policies would hurt their business in India. Now assuming the Indian Finance Ministry agrees on the proposal, the tax will now be applied from April 2020.
Despite the complaints from the industry, “Make in India” campaign has been a success. India is now second, after China in the list of countries producing smartphones. With brands like Apple, Samsung, and Oppo assembly partners Foxconn and Wistron setting-up factories in India, it has created over 600,000 jobs.
However, Apple holds only 1 percent of the Indian Smartphone Market. This is a clear result of the combination of low-cut and high iPhone price, exacerbated by import costs. For years the company has been selling outdated hardware as a workaround. In fact, Wistron is currently assembling only iPhone SE and 6s in the country.
If rumours are to be believed, Foxconn is planning to move some of its iPhone production to India. If they go ahead with it, they’ll be killing two birds with a stone – cutting down on import costs and reducing dependence on China, which is embroiled in a trade war with the U.S. It would eventually pave the path for Apple to open its first Indian retail stores as the company complies with sourcing requirements.