The country’s Union Budget for 2020 is slated to be announced later this week and reports suggest the government is likely to have some bad news for mobile manufacturers for the year ahead.
According to a Reuters report, the Indian government is likely to increase import duties on electronics, and a slew of other items which is now being recognised as ‘non-essential’.
This development is likely to cause some discomfort for the IT industry as a whole, which is still heavily reliant on importing raw materials from China and other countries.
Even though you have the Make in India programme, most of this initiative is associated with assembling of products, including phones, as the primary components are still being imported. Raising their duties will also result in an increase in prices of products for the consumer.
Government sources quoted in the report cite an import duty hike of 5 to 10 percent, which could prove costly for different sectors. But talking about the mobile sector in particular import duty hikes could have a spillover effect on the current landscape of local manufacturing, which has yet to bear fruit on a large scale.
You might say that having brands like OnePlus, Xiaomi and Samsung among others manufacture in the country is no small feat but imagine the impact these companies will face the moment import duties are increased.
This could also change Apple’s strategy for the Indian market, as the Cupertino-based giant has gradually started assembling a slew of iPhone models, with iPhone X also expected to be part of the line-up.
The Union Budget 2020 will be announced on 1 February and after this report, the industry will be hoping for better support from the government, instead of likely hampering its focus on local production.
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