HIGHLIGHTS
- The Government of India has announced an updated tax system in its latest budget.
- It has cut the custom duty on components used for making smartphones.
- This will benefit the iPhone manufacturing sector in the country.
Due to ongoing political tension, Apple is trying to shift its manufacturing unit to countries like India and Vietnam. They are trying to reduce dependence on China as much as possible. Now, the Indian government, in its latest budget, has announced a new tax regime that may heavily benefit iPhone production in the country.
iPhone production may see a major boost in India due to tax exemption
While announcing the Budget 2025, Union Finance Minister Nirmala Sitharaman announced that the Government of India has decided to reduce the basic customs duty (BDC) on components used for manufacturing smartphones from 2.5% to zero. Only selected components are exempted, such as the camera module, USB cable and PCBA (printed circuit board assembly).
This means that the brand will have to pay a net effective tax of zero rupees to the government on selected components of smartphones. Not only this, 28 capital goods, that are needed in manufacturing batteries of smartphones and EVs are also exempted from the basic customs duty.
The new tax system has the potential to be highly beneficial for the brand and to promote the local manufacturing sector. With Apple already considering a move away from China, this new tax system could serve as an incentive for India to attract more manufacturing units and enhance overall production.
