There are a few certainties. Death. Taxes. And people comparing the iPhone pricing between the US and India markets. Quite often, pre-tax US pricing, with the final pricing in India, including applicable taxes. The price tags in question at this time are the Apple iPhone Duo ( ₹2,99,900 in India versus $1,999 onwards in the US), the iPhone 18 Pro ( ₹1,64,900 onwards in India versus $1199 onwards in the US), and to an extent, the new price tags of the iPhone 17 in India.
It is important to contextualise data beyond the noise. First and foremost, the $1999 onwards pricing of the iPhone Duo in the US, as well as the $1199 for the iPhone 18 Pro in the US, are pre-tax prices. There is a local final state tax component, as well as further taxation components across different states (such as the California recycling tax). For instance, a $929 iPhone 17 (256GB) in the US works out to $1040.49 in the state of California. At a conversion rate of ₹95.59 to a $, this works out to ₹99,434.68 as the final purchase price. The same spec iPhone 17 is priced at ₹99,900 in India.
Over to the iPhone Duo’s $1999 price versus the ₹2,99,900 price tag in India for the 256GB version. At today’s exchange rate, the $1,999 iPhone Duo 256GB costs about ₹1,90,000 (direct conversion) before US sales tax. Many assume that should be the relative pricing in India as well. However, there is the certainty of taxes, that they forget.
India administers a 15% Basic Customs Duty (BCD) on the landing price of phones that are imported into the country in a fully-built state. For that purpose, the landing price of around ₹1,90,000 is considered for the BCD, which works out to around 28,516. Then there is an additional Social Welfare Charge which is charged at 10% of the customs duty, which in the case of the iPhone Duo, works out to around ₹2,852. The value of the iPhone Duo is now around ₹2,21,473 after the customs duties have been factored in.
{{/usCountry}}India administers a 15% Basic Customs Duty (BCD) on the landing price of phones that are imported into the country in a fully-built state. For that purpose, the landing price of around ₹1,90,000 is considered for the BCD, which works out to around 28,516. Then there is an additional Social Welfare Charge which is charged at 10% of the customs duty, which in the case of the iPhone Duo, works out to around ₹2,852. The value of the iPhone Duo is now around ₹2,21,473 after the customs duties have been factored in.
{{/usCountry}}The BCD was reduced from 20% earlier to 15% in the Union Budget 2024-25.
“iPhone Duo is an engineering marvel with top-notch precision manufacturing including a newly designed PCB and the most complex but sophisticated folding hinge engineering. Apple partners at this point cannot replicate the manufacturing process right of the bat, and will need additional investments and manufacturing experience curve to manufacture this domestically,” points out Neil Shah, Vice President of Research at Counterpoint.
As a result, Apple must import completely built-up units, or CBUs, for the iPhone Duo. Hence, Apple must pay the import duty.
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Important to note, landing cost includes the cost of making the phone and shipping from manufacturing hubs into India. Components, particularly memory and storage, have become increasingly expensive this year, which has inflated bill of materials for phone makers including Apple. Debatable investments towards AI infrastructure has led to a significantly short supply of memory and storage for consumer devices such as smartphones, and that demand versus supply skew has driven prices higher.
At this point, Apple must also consider the 18% Import GST on the value after customs duties, which works out to around ₹39,856. That means the value of the iPhone Duo in India, at this stage of its progression towards retail stores, is now around ₹2,61,338. Important to note that IGST is generally available as input tax credit.
Apple works with two numbers— ₹2,61,338 and ₹2,21,473 before deciding the sale price of the phone. Since Apple values the currency conversion at a higher rate as a buffer for rate volatility and geopolitical uncertainty across geographies, they decided the final sale price should be ₹2,99,900. Before the product is ready for sale in India, the iPhone Duo will attract an 18% GST on this number, which works out to ₹45,747.
There is a remaining ₹32,680 between the ₹2,21,473 effective cost after customs value calculation, and the final GST contained cost of ₹2,67,200 stacking up against the final price of ₹2,99,900. For Apple, there are margins to consider including freight and logistics, Apple’s margin, dealership margins as well as advertising, and distribution costs.
“Remove the import duty, and the iPhone Duo pricing is comparable to the standard price difference for iPhones which we have been seeing over the years between US and non-US markets such as India, Europe or Middle East,” Shah says.
There is an argument that the iPhone 17 is manufactured in India, and therefore shouldn’t have seen a price hike a few hours after the iPhone Duo and the iPhone 18 Pro was announced at the annual keynote. However, no phone is immune to the reality of expensive component costs. In recent months, prominent phone makers have hiked prices of phones already on sale in India.
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Samsung has marked multiple rounds of pricing changes for its mid-range Galaxy phones. Vivo has also repeatedly increased prices of various phones on sale, while there are reports of as much as 25% price increases for certain Oppo phones. Apple has only now corrected the prices of the iPhones that are already on sale, to reflect the reality of input costs including components.