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INDIA: Duty Cuts Mooted for High-End Mobile Phone Imports

It is believed that that the government is planning to cut the import duty payable on mobile handsets valued at more than INR50,000 (US$682). The rumoured move is said to be aimed at resolving an ongoing trade dispute with the US in the wake of the latter’s decision to rescind duty-free access to the US market for US$5.6 billion worth of Indian exports.

While the US is believed to have asked India to cut duties on all imported mobile phones, the Indian government has indicated that the removal of the import duty on lower-priced models would put domestic manufacturers at a disadvantage compared to cheaper overseas-sourced products. In January last year, the Indian government raised the Basic Customs Duty (BCD) on imported mobile phones from 15% to 20% in a bid to boost the domestic production of mobile phones, while acting to restrict (the mostly Chinese) imports in the sector. The following April, it then imposed 10% BCD on all imported printed circuit assemblies (PCAs) and other key smartphone components.

At present, India is also coming under pressure from the EU to cut import duties on mobile phones and components, which are said to be contrary to the country’s obligations under the terms of the World Trade Organisation’s Information Technology Agreement. While a resolution to the trade dispute with the US is unlikely until after the result of this year’s general election in India is announced (23 May), any cut in import duties on high-end mobile handsets would inevitably benefit overseas suppliers.

Content provided by Picture: HKTDC Research
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