Mobiles Phones to Get Costlier As Govt Announces 10% Import Duty on Display Panels

Mobile phones are about to get more expensive in India as the government has imposed a 10 percent import duty on display and touch panels. Smartphones and feature phones sold by Samsung, Apple, Vivo, Xiaomi, Oppo, Realme, and more brands are said to get more expensive due to this move. It comes as the government’s efforts towards the Atmanirbhar Bharat (self-dependent India) campaign which aims to promote local manufacturing over imports. The actual impact of the duty would be 11 percent for importers due to an additional cess. The Indian Cellular and Electronics Association (ICEA) said that the direct impact on mobile phone prices will be a 1.5 percent to 3 percent hike.

The 10 percent duty was proposed to be applied from October 1 under a phased manufacturing programme (PMP). PMP was announced in 2016, also with an aim to facilitate local manufacturing of components and discourage imports. While some manufacturers have said that their prices will go up immediately, some are “looking to absorb as much as possible,” a report said. It is said that a display or a touch panel accounts for about 15 percent – 25 percent of the cost of a device depending on quality.

Currently, only four companies including Holitech and TCL make display panels in India. The government has clearly indicated that in order to keep the cost down, companies need to manufacture their components in India. In order to encourage such companies, the Ministry of Electronics and Information Technology had rolled out a production linked incentive (PLI) scheme earlier this year, which aims to incentivise manufacturers who are producing their materials in India. The PLI scheme would give incentives of 4-6 percent to electronics companies which manufacture mobile phones and other electronic components in India.