Days after the Indian government announced its decision to reduce import duties on foreign-made smartphones to 15% from 20%, Apple on Friday cut the prices of all its iPhone models in India. The price cuts vary depending on the iPhone model, with the locally manufactured iPhone 13, iPhone 14 and iPhone 15 seeing smaller cuts of around 300 rupees ($3.60). However, other iPhone models saw bigger price cuts, including a 2,300 rupee ($27.50) price cut for the iPhone SE.
iPhone Pro models get price cut in India
The ultra-premium iPhone 15 Pro and iPhone Pro Max will see the biggest price cuts of up to 6,000 rupees ($72).
Also read: Apple to start iPad production in Tamil Nadu with Foxconn
This marks a major shift in Apple’s pricing strategy in India and marks the first time the tech giant has cut prices of the current-generation iPhone Pro models in the country.
India’s price cut coincides with falling demand from China
The timing of the price cuts in India coincides with reports of slowing iPhone demand in China, another major market for Apple. Apple’s smartphone shipments there fell 6.7% year-over-year in the most recent quarter, according to the latest data from market research firm Canalys.
And the latest data from Consumer Intelligence Research Partners (CIRP) reveals an interesting trend in the smartphone market, with Android users switching to the Apple iPhone on a large scale: in the June quarter, former Android users made up 17% of new iPhone buyers, the highest figure in the past five years, nearly doubling from 10% in the same period last year.
Understanding GST and customs duties on imported goods
In India, smartphones are taxed differently depending on whether they are imported or locally manufactured. Currently, imported devices are subject to 18% Goods and Services Tax (GST) and 22% customs duty, plus a 10% surcharge on top of basic customs duty.
The recent budget announcement has introduced changes to this structure: basic customs duty on imported smartphones will be reduced to 15%, while surcharge will remain at the new rate of 10%. As a result, the total customs duty, consisting of 15% basic customs duty and 1.5% surcharge, will come down to 16.5%.
For smartphones manufactured in India, the tax burden is significantly lower – just 18% GST applies.
Apple has made great strides in localizing production: Currently, 99% of iPhones sold in the Indian market are manufactured locally. Only some premium iPhone models continue to be imported.
