Buying smartphone? Pay 25% more after March 31!

In a bid to encourage local manufacturing and boost 'Make in India' initiative, the government has hiked two per cent special additional duty on printed circuit boards (PCBs) from April 1. 

However, according to reports, CyberMedia Research estimates that with the imposition of goods and services tax (GST), the price of smartphone handsets would increase by around 25 per cent. PCBs constitute half the cost of a mobile, around 54 per cent, as PCBs are imported from China and Taiwan because no manufacturing plant has been set up locally.

According to Tarun Pathak, analyst, Counterpoint Research, "PCBs worth nearly Rs 40,000 crore (USD 6 billion) had been imported." Meanwhile, industry experts say bringing down the cost of manufacturing of smartphones is not going to be easy because most of the features like camera, PCBs and display panel, etc are imported. Laying emphasis on this aspect, Vevek Zhang, the Chief Marketing Officer of Vivo India said, "Over time, we can expect smartphone manufacturing in the country by major players in India."

In short, consumers may have to spend more for smartphones from the next financial year as the additional duty proposed in the Budget will lead to price hike.