Budget 2021: will phones become more expensive with new custom duties?

Also read: Mi TV 4A, 4A Pro, Horizon Edition, and more receive up to Rs 3,000 price hike in India

Phones may become more expensive in India

Finance Minister Nirmala Sitharaman had the following to say about smartphones and smartphone peripherals, "Domestic electronic manufacturing has grown rapidly. We are now exporting items like mobiles and chargers. For greater domestic value addition, we are withdrawing a few exemptions on parts of chargers and sub-parts of mobiles. Further, some parts of mobiles will move from ‘nil' rate to a moderate 2.5 percent". This means that smartphones and chargers will get more expensive in India soon. Here's how much tax each part will attract. 

Many smartphone OEMs already operate on razor-thin margins in the hypercompetitive Indian market. With the additional increase in costs, they'll have no choice but to cut additional corners, further compromising on key, but often neglected aspects such as type of material used, quality of components, etc. The increased tariff on accessories also incentivises more companies to adopt Apple, Samsung, and Xiaomi's strategy of removing the charger from the retail packaging. Other consumer electronic goods such as air conditioners and refrigerators will get more expensive too.