Days after the government announced its decision to reduce import duties on foreign-made smartphones from 20 per cent to 15 per cent, Apple on Friday implemented price cuts across its iPhone lineup in India. The price cuts vary by iPhone model, with the locally manufactured iPhone 13, iPhone 14, and iPhone 15 seeing modest decreases of around Rs 300 ($3.6). However, more substantial price cuts have been implemented to other iPhone models, with the iPhone SE price dropping by Rs 2,300 ($27.5).
iPhone Pro Models Getting Biggest Price Cut In India
The super premium iPhone 15 Pro and iPhone Pro Max are getting the largest price cuts of up to Rs 6,000 ($72).
Also read: In A Big Move, Apple May Start iPad Production In Tamil Nadu With Foxconn
This marks a significant shift in Apple’s pricing strategy for India, as this is the first instance of the tech giant lowering prices on its current-generation iPhone Pro models in the country.
India Price Cuts Coincide With Falling China Demand
The timing of these price cuts in India coincides with reports of slowing iPhone demand in China, another key market for Apple. Recent data from market research firm Canalys indicates that Apple’s smartphone shipments in China decreased by 6.7 per cent in the most recent quarter compared to the same period last year.
Also, recent data from Consumer Intelligence Research Partners (CIRP) reveals an interesting trend in the smartphone market, which shows a significant increase in Android users making the switch to Apple iPhone. During the June quarter, a five-year high of 17 per cent of new iPhone purchasers were former Android users, nearly doubling from 10 per cent in the same period last year.
Understanding GST, Customs Duty On Imports
In India, the tax structure for smartphones varies depending on whether they are imported or locally manufactured. Currently, imported devices are subject to an 18 per cent Goods and Services Tax (GST) and a 22 per cent customs duty. Additionally, there is a surcharge of 10 per cent on the basic customs duty.
The recent budget announcement has introduced changes to this structure. The basic customs duty on imported smartphones will be reduced to 15 per cent, while the surcharge will remain at 10 per cent of this new rate. As a result, the total customs duty will decrease to 16.5 per cent, comprising the 15 per cent basic duty plus a 1.5 per cent surcharge.
For smartphones produced within India, the tax burden is significantly lower, with only the 18 per cent GST being applicable.
In the case of Apple, the company has made significant strides in localising its production. Presently, 99 per cent of iPhones sold in the Indian market are manufactured domestically. Only a small selection of high-end iPhone models continues to be imported.
