Right now, smartphones imported from the US into India are charged a basic customs duty (BCD) of 16.5% plus a surcharge.
India is now open to lowering or removing these import taxes on smartphones coming from non-manufacturing countries like the US and the European Union (EU).
This could be part of new trade agreements. Since India hardly imports smartphones from these regions, there’s little risk to its local industry by making this change.
Currently, phones from the US face a 16.5% customs duty, while those from the EU are taxed up to 20%.
A senior official explained, “We won’t cut tariffs on phones from countries like Vietnam that produce smartphones.
But we can offer concessions to the US and EU since they don’t manufacture these products and won’t harm our domestic production.”
Lower Prices for Indian Consumers
The official added, “Giving tariff concessions to non-producing countries under an FTA (Free Trade Agreement) will help reduce costs for Indian consumers.”
In March, the Indian Cellular and Electronics Association (ICEA) had requested the commerce ministry to remove import tariffs on smartphones, telecom gear, wearables, and other electronics from the US.
Since the US doesn’t compete with India in making these items, ICEA said that zero tariffs would help Indian manufacturers reach their goal of exporting $50 billion in smartphones and $80 billion in total electronics to the US.
Other Benefits for India
Lowering US smartphone import duties could also shield India’s tech sector from sudden policy changes in the US. With the EU, it could help end a long-running World Trade Organization (WTO) issue.
In 2019, the EU filed a WTO complaint against India’s high customs duties on Information and Communication Technology (ICT) goods, including mobile phones.
The EU said India’s taxes broke WTO rules. In April 2023, the WTO ruled in favor of the EU. Following this, India agreed to try to solve the issue through talks with the EU.
