Finance Minister Nirmala Sitharaman presented the union budget 2019 in Parliament today. Presenting her first budget, the Finance Minister has announced a reduction in customs duty of camera module, charger, and adapter of mobile phones.
With this move from the government, mobile phones are going to be cheaper in India. Apart from mobile phones, electric vehicles, leather items, and defense equipment will also be cheaper as their custom duty is also reduced.
On the other hand, imported books, gold, petrol & diesel, CCTV and imported auto parts will become costlier as the import duty on these items has been hiked.
Back in July 2017, the government had announced a custom duty of 10% on mobile phones and other electronic items with the implementation of GST. It was raised again to 15% in December 2017.
Further, in the budget of 2018, the customs duty on mobile phones was again raised from 15 percent to 20 percent. The government’s aim with increasing the duty on electronic items was to increase domestic production in India and to boost its Make in India initiative.
However, for Indian manufacturers, cheaper smartphones will only be a challenge as they will face stiff competition from low-cost phones manufactured in China.
India is the world’s second-largest market with 1.15 billion telecom subscribers and 512 million internet subscriber base. Analysts expect that mobile phone subscription in India is expected to reach 1.4 Billion by 2021.
Moreover, the smartphone market in India is also growing at a rapid rate. The smartphone market grew at 14.5% in 2018 and it is expected to grow by 15% in 2019.