India Removes Mobile Component Import Tax, Apple And Xiaomi Profit

Apple made a profit due to changes in India's import tax (photo: dock. unsplash)

Indian Finance Minister Nirmala Sitharaman said his country officially removed the import duties of several components used to produce smartphones.

This statement was made in the annual budget on February 1, according to a Reuters report. The decision made to encourage domestic production efforts is to benefit foreign companies such as Xiaomi and Apple.

The list of components that are tax-free includes printed circuit papa, components for camera modules, and USB cables. Previously, all of these components were taxed at 2.5 percent, but now foreign producers in India can reduce their expenses.

In the last six years, electronic goods production in India has increased by more than double. By 2024, production revenues have reached 115 billion US dollars (Rp1,890 trillion), making India the second largest mobile phone producing country in the world.

Xiaomi, especially Apple, is considered to have benefited from this tax freedom. Apple leads the mobile market in India by reaping 23 percent of the share in total revenue last year. In second place, there is Samsung with a share of 22 percent.

Despite benefiting foreign companies, this tax cut is believed to be able to help India overcome global trade disruptions. This problem arises as a result of the tariff threat set by US President Donald Trump.

This change has actually been considered since last year. In the 2024 budget, Sitharaman said that a review of the state import duty tariff structure is needed. This needs to be done to facilitate trade.

The government considers that the tax tariff structure of import duties in the country is so complicated that it hinders the efficiency of local production and causes disputes. Therefore, India decided to cut import taxes on several components of smartphones.