India has announced the removal of import taxes on key iPhone components, a move designed to strengthen its position as a global manufacturing hub. The decision, revealed by Finance Minister Nirmala Sitharaman in her annual budget speech, is expected to benefit major manufacturers like Apple and its suppliers.
Key Components Exempted from Import Taxes
The tax cut applies to essential iPhone components, including printed circuit board assembly (PCBA), camera module parts, and USB cables. Previously, USB cables were taxed at 2.5%, while other components faced additional import duties. The latest policy eliminates these taxes, making it cheaper for companies to assemble iPhones in India.
Strategic Move to Compete with China and Vietnam
Industry experts see this as part of India’s long-term strategy to attract high-tech manufacturing away from China and Vietnam. The Indian government has already introduced incentives, such as a $2.7 billion subsidy package, to encourage global tech firms to shift production. The removal of import duties further strengthens India’s appeal as an alternative production hub.
Impact on Apple and Other Manufacturers
Apple’s suppliers, including Foxconn, already manufacture iPhones and accessories in India. The recent tax cuts will further reduce production costs, increasing the profitability of local assembly. Apple has been gradually shifting production outside China to minimize risks from trade disruptions and tariffs. The company aims to manufacture 25% of all iPhones in India by 2028.
Broader Implications for India’s Tech Sector
The policy shift not only benefits Apple but also boosts India’s standing in the global electronics industry. By making local assembly more cost-effective, India can attract more investment from leading tech firms. Additionally, the simplified tax structure is expected to create jobs and support the country’s ambition to become a major player in electronics manufacturing.
India’s decision to remove import taxes on iPhone components is a calculated move to strengthen its manufacturing sector. As Apple and other tech giants look to diversify their supply chains, India is positioning itself as a prime destination for high-tech production.
