Smartphones and feature phones in India are set to become costlier due to a newly imposed 10% import duty on display and touch panels. The move is in line with efforts to increase the local production of such components in the country.
A report by TOI highlights the new import duty, mentioning an additional cess that increases it to an effective 11%. As per sources cited in the report, the new taxation can lead to an increase of anywhere between 1.5% and 5% in the retail cost of the smartphones.
This is because display and touch panels are some of the most crucial components of a smartphone. Among all the components used in their manufacturing, display and touch panel account for more than 15% cost of the device, at times going up to as much as 25% of its total cost.
The new import duty has not been introduced abruptly and instead was brought to the industry in a phased manner. It was originally slated to come into effect from April last year. These components were some of the main elements in the phased-manufacturing programme (PMP) earmarked for mobile phones.