Smartphone prices unlikely to drop despite budget 2024 duty cuts: Here's why

The Budget 2024 has revised the basic customs duty on mobile phones, raising the question of whether the latest premium iPhones and Pixel phones will now be cheaper in India. Despite being eligible for the duty cut, it seems unlikely that prices will come down.

Industry experts suggest that the recent reduction in basic customs duty on mobile phones and components will not significantly benefit consumers. The customs duties apply to phones imported from other countries, impacting brands like Apple and Google. However, will the iPhone 15 Pro and the Pixel 8 Pro see a price cut in India following these changes?

"The reduction of BCD on smartphones, chargers, and PCBA will not majorly impact smartphone prices. We might see a 1 to 2 percent price cut on average, but it depends on OEMs if they choose to pass this on to consumers," explained Tarun Pathak, Research Director and Telecom Analyst at Counterpoint Research.

While premium phones have been in demand in the Indian market, the majority of buyers still prefer the affordable and mid-range segments. So, will these revisions help save money on the next phone purchase? “Since the launch of 5G smartphones, growth has favored the premium segments. This opportunity is nearly exhausted. We need interventions to make affordable 5G smartphones,” said Mohammad Faisal Ali Kawoosa, Founder of Techarc, explaining the reality of the government’s decisions.

Despite the customs duty reduction from 20 percent to 15 percent sounding significant, ongoing inflation and the high cost of raw materials mean the impact of these cuts might not reach consumers.

Experts hoped for slab-wise revisions to aid the growth and availability of affordable 5G phones. “In lower price segments, margins are very low, so we may not see significant price cuts,” added Tarun, dampening consumer excitement following the government's announcement.

With a significant portion of phone manufacturers shifting production to India, the government seeks to incentivize giants like Apple and Google to establish a long-term production and export hub in the country.