Union Budget 2023: The Immediate Impact On Smartphones Union finance minister Nirmala Sitharaman announced a reduction in custom duty charges for several products which will make smartphones cheaper. However, this might not have an immediate impact on prices or demand
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In the fifth and last full Union Budget of the ruling government before the next General Elections, Union finance minister Nirmala Sitharaman announced a reduction in customs duty for several products which will make smartphones cheaper in the near future. In order to deepen domestic value addition in the manufacturing of mobile phones, the finance minister proposed to provide relief in customs duty on import of certain parts and inputs such as camera lens and will continue the concessional duty on lithium-ion cells for batteries for another year. "Customs duty reduction in select component parts used in mobile phones will help increase domestic value addition. This will have a positive impact on the domestic component manufacturing industry," said Muralikrishnan B, president, Xiaomi India.
The conventional thrust areas of infrastructure have also received a big boost, which will directly impact device manufacturing in india. "The announcement to further reduce customs duty is another great step in this direction," said Sanmeet Singh Kochhar, VP- India and MENA, HMD Global, Home of Nokia phones.
With India's smartphone manufacturing sector witnessing an upward trajectory, this move would also help in resolving supply chain issues. "The finance minister's customs duty relief would further help incentivize global manufacturers looking to diversify supply chains and shift to India for manufacturing," said Lokesh Payik, partner at Bain & Co.
The announcement of reduction in personal taxation would put more money in the consumer's pocket increasing both discretionary and planned spending, therefore, boosting purchasing power. "The reduction of customs duty across several components is a welcome move as it aligns with the industry's focus on keeping prices low and enhances the reach of consumer tech devices across the economic spectrum," said Madhav Sheth, CEO, Realme India.
The mobile phone output rose from 58 million units in 2014-15 to 310 million units in the last fiscal year. Mobile phone production in India has witnessed a phenomenal increase in recent years owing to policy support. However, commenting on the recent Budget announcement, IDC analyst Navkendar Singh said, "We don't see an immediate impact either from demand side or prices coming down."
