India Imposes 10 Percent Tax on Import of Key Smartphone Components

India has imposed a 10 percent tax on imports of key smartphone components including populated printed circuit boards, which are at the heart of smartphones, according to a government document.

The government's move on Monday confirmed a Reuters report from last week that the country was exploring new duties on the imports of populated printed circuit boards that include components such as processors, memory and wireless chips.

A 10 percent customs tax was also imposed on the imports of camera modules for phones and connectors.

The move, part of a phased manufacturing plan for lifting local production of mobile devices, is aimed at boosting Prime Minister Narendra Modi's flagship 'Make In India' drive to turn the country into a manufacturing hub, like neighbouring China.

Back in February, the Union Budget 2018 announcement raised the customs duty on mobile phones from 15 percent to 20 percent. The announcement was aimed at increasing the local production of phones in India, as those devices do not come under this duty and can, therefore, be sold much more cheaply. The government first announced a duty of 10 percent in July 2017. After just half a year, that was then raised to 15 percent in December.

A few brands, particularly in the premium space, are most likely to be affected by this decision, Counterpoint Research analysts say. Apple was named, and sure enough, within a few days, the Cupertino giant raised the prices of several of its handsets. Other big brands have taken to assembling in India, such as Samsung, HMD Global, and Xiaomi.

Written with inputs from Reuters