India has raised the import tax on dozens of digital items like mobile phones and television sets, a government statement said, to help curb supplies from overseas and also build up the domestic sector.

The rise in tax from 10% to 15 percent on handsets will create imports of phones – including the majority of Apple’s iPhone versions – costlier at a time the organization’s earnings growth is slowing in India’s $10 billion (roughly Rs. 64,054 crores) smartphone market.

Prime Minister Narendra Modi has established a flagship Make-in-India programme to expand the domestic industrial base, also one of the regions showing achievement is electronic equipment.

Pankaj Mohindroo, president of this Indian Cellular Association, said on Friday the tax hike will boost domestic manufacturers that are making about 500 million cellphones a calendar year, more than double the output three decades ago.

Eight out of 10 mobiles sold in 2017 are made locally, data from Counterpoint Research revealed.

Samsung Electronics assembles in India most of these handsets it sells in the country.

Apple currently only assembles its iPhone SE versions in India and imports its others. The business has sought a range of incentives and tax relief from the government for it to expand its manufacturing in India, but government officials have said they are unlikely to make exemptions for Apple.

Tarun Pathak, an associate director at Counterpoint Research, stated the government’s new tax notification, announced late on Thursday, will impact mobile phones companies heavily dependent on imports.

“It’ll impact Apple the most since the firm imports 88 percent of its own apparatus into India,” he explained. “Either this will cause increase in iPhone prices or force Apple to begin building more in India.”

Aside from cellphones, the government also increased the import tax on movie cameras to 15 percent from 10 per cent and dropped the one on television sets 20 percent, its statement said.

On Monday, a delegation of Indian telecoms equipment manufacturers met Finance Minister Arun Jaitley, seeking government aid to advertise the domestic industry while he adopts the budget for 2018/19.

India’s products imports at the seven weeks ending October climbed 22 percent to $256.4 billion (approximately Rs. 16,42,514 crores) in the year before, increasing concerns among policymakers.


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