The upcoming iPhone 17 is expected to be more expensive for Indian buyers compared to other countries, continuing a trend observed in previous iPhone releases. Several factors contribute to this price disparity, including import duties, Goods and Services Tax (GST), and currency exchange rates.
Impact of Import Duties and Taxes
India typically imposes higher import duties on electronics compared to countries like the US, China, and Malaysia. These duties, along with the 18% GST, significantly increase the final price of iPhones in India. Even though the Indian government has been taking steps to reduce import duties on components, the impact on retail prices may be minimal.
In the Union Budget 2025, the government removed import duties on key mobile phone components to boost local manufacturing. Components such as printed circuit board assemblies (PCBAs), camera module parts, and USB cables, which previously faced a 2.5% import duty, are now exempt. While this measure aims to reduce production costs and encourage domestic manufacturing, industry experts believe that it may not result in a significant price drop for consumers.
Currency Depreciation
The Indian rupee's depreciation against the US dollar further exacerbates the problem. A weaker rupee increases the cost of imported components, which account for a significant portion of iPhone production, even with local assembly. According to Techarc analyst Faisal Kawoosa, imported components constitute 85-90% of the iPhone's production cost.
"Make in India" Initiative and Its Limitations
The Indian government's "Make in India" initiative aims to promote domestic manufacturing and reduce reliance on imports. While Apple has ramped up iPhone assembly in India, the benefits of local manufacturing have not translated into lower prices for consumers. Despite local assembly, a large percentage of components are still imported, making them subject to import duties and currency fluctuations.
Comparison with Other Countries
The iPhone 17 series is expected to be more expensive in India compared to several other countries, including the US, Hong Kong, Japan, and Vietnam. For instance, the iPhone 17 Pro (256 GB) is priced significantly higher in India than in the US, despite local manufacturing. This price disparity raises questions about the effectiveness of local assembly in reducing costs for Indian consumers.
Potential Impact of US Tariffs
The possibility of increased tariffs on goods imported from India to the US could further complicate the situation. While some reports suggest that Apple might be exempt from these tariffs, broader tariffs on semiconductors and other technology components could disrupt global supply chains and affect iPhone prices in India.
Expert Opinions
Industry analysts suggest that several factors could prevent manufacturers from passing on the benefits of reduced import duties to consumers. Rising production costs and a depreciating rupee may offset any potential savings from duty reductions. Some analysts predict only a marginal decrease of 1-2% in smartphone prices, depending on the manufacturer.
Conclusion
While the Indian government is taking measures to promote local manufacturing and reduce import duties, several factors continue to contribute to higher iPhone prices in India. These include the impact of existing tariffs, GST, currency depreciation, and potential new tariffs. As a result, Indian consumers may have to pay a premium for the iPhone 17 compared to their counterparts in other countries.
