At the Union Budget 2019, it was announced by Finance Minister Nirmala Sitharaman that the capital goods that are used for manufacturing mobile phones including camera module, charger/adapter, Lithium Ion cell, compact camera module and display module have been reduced, the overall cost of mobile phones will also reduce.
India is the second largest telecommunications market in the world with over 1.15 billion wireless subscribers and 512 million internet users. The country’s smartphone market grew rapidly at a rate of 14.5% in 2018. Previous estimations have predicted that the mobile subscriptions in India will reach 1.4 billion by the year 2021. This sector is expected to growth at a rate of 15% this year.
This increase in the customs duty left an impact on the foreign companies such as Google and Apple that depend on imports. The low-cost smartphones are a major challenge for the domestic manufacturers as face a stiff challenge from the low-cost phones that are brought to the country by the Chinese brands. And, with the new change in the budget that focuses on boosting the market for the homegrown makers.
Back in the Union Budget 2018, there was an increase in the customs duty on mobile phones taking the same to 20% from 15%. This increase was aimed at increasing the local production in India. In the previous year that is 2017, the government announced 10% of customs duty. Later, in December the same year, the same was increased to 15%.
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