Mobile phones will not get cheaper despite concessions from govt: Experts

Finance Minister Nirmala Sitharaman announced duty concession on some mobile parts such as chargers and camera lenses at the Union Budget 2022 on Tuesday. Many believed that the concession will help cut down the retail price of mobile phones and in turn impact consumers’ pockets. Experts, however, have a different take on this.

Most industry experts believe that the concession on mobile phone parts will not impact smartphone prices or the end consumer in any way, at least not any time soon. Speaking to BGR.in, Navkendar Singh, Research Director with IDC India, said that duty concessions will not bring down mobile phone prices immediately. “No. Won’t bring down immediately. Margins are under immense pressure anyhow,” Singh said.

“Duty concessions are being given to parts of the transformer of mobile phone chargers and camera lens of mobile camera module and certain other items. This will enable domestic manufacturing of high growth electronic items,” the finance minister said presenting the budget 2022 – 2023.

Speaking about the impact on mobile phone prices in India, Tarun Pathak, Research Director at Counterpoint, said there may be a 2-3 percent relief on end-product, but the value add in these components will be happening soon as well. “In terms of impact on end-consumer pricing, it is unlikely to have an impact because other costs – like logistics, shipping and components prices have increased. So this much delta is unlikely to be passed on to consumers,” Pathak explained.

Head- Industry Intelligence Group at CMR, Prabhu RAM believes that the reduction in duty on parts of transformers of chargers and part of camera module augurs well for their enhanced localization in India. However, he also doesn’t see these translating into a reduction in mobile handset prices in the immediate future. “A long road lies ahead,” he said.

Sitharaman also hiked custom duty on wearables and hearables, which means prices of headphones and smartwatches being imported will be increased marginally. The idea is to boost local manufacturing of wearables and hearables. “Electronic manufacturing has been growing rapidly. Customs duty rates are being calibrated to provide a graded rate structure to facilitate domestic manufacturing of wearable devices, hearable devices and electronic smart meters,” FM said at the budget.

Experts believe that this will lead to faster transition on hearables and wearables local assembling and local component sourcing within two years, excluding some high-value components.

Commenting on the budget, the Chinese smartphone manufacturer Xiaomi said that it has been ramping up on local manufacturing, since 2021, and have been focusing on local sourcing components like camera sensors, batteries, and more. “We are working actively to localise manufacturing of wearables & hearables in the country to further strengthen our local manufacturing,” the company added.

The post Mobile phones will not get cheaper despite concessions from govt: Experts appeared first on BGR India.