Apple’s profit margins may come under threat as industry body Consumer Electronics and Appliances Manufacturers Association (CEAMA), which comprises handset-makers like Samsung, Micromax, LG, Intex and Panasonic, has requested the Indian government to slash import duties on smartphone accessories levied as per this year’s Budget saying that the levy places companies with local manufacturing facilities at a disadvantage in contrast to firms like Apple which imports ready-to-sell packages.
“There is an anomaly in duties which the government should look into, as it will benefit only a few brands like Apple which are currently importing finished goods and have no manufacturing investment in India as compared to all the other smartphone makers who are investing in India,” Ravinder Zutshi, chairman of CEAMA, was quoted as saying to the Economic Times .
As per this year’s budget, while 29 percent customs duty on batteries, chargers, adapters, speakers and wired headsets that are imported by brands which manufacture in India were levied, importers of completely built units had to pay only 12.5 percent on the same accessories which account for up to 40 perce t of the cost of mobile manufacturing.
As a result, the net benefit of players like Samsung and Micromax has come down to five percent. The ET report also quoted two senior industry officials saying that several handset-makers have directly reached out to the government against players like Apple.
Also, many handset-makers are against Apple’s proposed plans of selling refurbished and pre-owned phones in the country.