2 months ago
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Indians pay the highest amount for buying a newly launched iPhone in the country. And there's no denying that many Indians opt to get iPhones at a cheaper price from the US, Dubai, Vietnam and other regions where taxes are lower. Now, few media reports are claiming that Apple may be starting to “make” (read as assemble) the Pro models of iPhone 16 in India from this year. Apple is already assembling several iPhone models in India, including the latest iPhone 15 and iPhone 15 Plus. In fact, Apple iPhone SE was the first “assembled-in-India” iPhone in 2017 by Foxconn. But if this news is true then it will be the first time that Apple would be making its high-end flagship variant in India. However, it is worth noting that Apple hasn't confirmed as to whether or not it will start “making” iPhone 16 Pro and iPhone 16 Pro Max in India yet. Also, no representative from its manufacturing partners or the government has come on record to confirm the same, yet.
Will iPhone 16 Pro Max and iPhone 16 Pro prices reduce if made in India?
While assembling a top-end iPhone in India is certainly a step in the right direction for India's electronics manufacturing industry, the real question is whether or not buyers will stand to benefit from this or not. Historically, for iPhones, whether made in India or imported from China has never been a factor in Apple's books with respect to pricing. The prices of iPhone 15, iPhone 15 Plus or the iPhone 14 series continued to remain the same despite being made-in-India from the first day of the sale. Apple has never reduced prices in India just because a particular model is now locally assembled. Despite iPhone 15 boxes flaunting “Assembled in India”, Indians still opt to buy it from abroad at lesser prices. The only relief for Indian buyers is during annual online sales hosted by Amazon and Flipkart.
Also read: iPhone prices to reduce in India after Union Budget 2024? 5 questions answered
So, going by past trends, it is highly unlikely that prices of iPhone 16 Pro Max and iPhone 16 Pro will be lower if they are made in India. In fact, for the Pro variants of latest iPhones, Indians tend to pay anywhere between ₹20,000 and ₹45,000 more if they buy from India when compared to the prices in the US. This price inflation is mostly due to taxes by the Indian government.
The government of India currently charges 18% Goods and Services Tax (GST) on mobile phones. This means a buyer pays an additional 18% of the phone's price as tax. In the Union Budget 2024, the government did not announce any changes in this tax.
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Will reduction in Basic Customs Duty (BCD) help reduce prices of iPhones?
The short answer is NO. Finance Minister Nirmala Sitharaman announced a decrease in the Basic Customs Duty (BCD) on smartphone components like printed circuit boards and mobile chargers from 20% to 15% in the Union Budget 2024. While this reduction in BCD sounds like a welcome move hinting at prices of smartphones in India coming down, in reality, the market doesn't expect much of a change.
With thin margins, increasing prices of chipsets, a fluctuating Rupee and intense competition in mid to premium smartphone segments, the 5% reduction in BCD may not be enough to pass on the benefits to buyers. Things would be usual for market leaders like Samsung and buyers shouldn't expect any major price cut on Samsung smartphones apart from regular offers as the company makes almost all devices in India.
The story is similar for those looking at buying iPhones or to be specific, the upcoming iPhone 16 Pro Max or iPhone 16 Pro. Even if Apple does end up saving some tax money by assembling in India, it is highly unlikely that Apple would pass on this benefit to Indian buyers.
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