Proposed duty levy on components to hit Indian handset makers most: Industry

New Delhi: Indian smartphone makers such as Lava and Micromax are likely to be the most affected by the increase in basic customs duty (BCD) on import of mobile phone sub-parts as the move will mostly impact the sub-Rs 10,000 category, as per industry executives and analysts.

They say the levy of duty will add cost pressure on brands competing in the sub-Rs 10,000 category, but market leaders such as Xiaomi—which dominates the segment—will be able to absorb the cost, which can be offset with the kind of volumes they sell.

The government has proposed that with effect from April 1, BCD on import of printed circuit board assembly (PCBA), camera modules and connectors should be raised to 2.5%. For PCBA and moulded plastic for manufacture of charger or adapter, duty should go up from the existing 10% to 15%. Whereas, other inputs and parts of chargers will attract 10% duty, from nil earlier.