New York City, United States, 10/05/2021 / Top Wire News /

On average, an Apple customer in India pays 35% more for the base model of the iPhone 13 as compared to what a US-based customer pays. The pro model of the iPhone 13 costs a whopping 60% more than the price charged in the US. This price differential exists for most iPhone models with the notable exception of iPhone 7 and iPhone SE. This huge difference in prices forces one to ask why iPhones are costlier in India?

Reasons for the huge price difference

There are many reasons for the huge difference in prices of iPhones in India and the US. The first reason is that Apple does not have any local manufacturing capacity in India and most iPhones sold in India are imported from other countries. This makes the imported iPhones susceptible to import duty and other taxes that are primarily designed for imported goods.

Smartphones are taxed at 18% as per the goods and service tax or GST tax framework in India. This steep tax also plays a crucial role in inflating the price of iPhones. The net import duty has also been increased by an additional two percent.

However, there are some models of iPhone that are cheaper in India such as the iPhone 7 and iPhone SE. The primary reason behind these is that these two models are assembled in India using imported parts and thus become eligible for tax breaks and also no import duties are applied on these “Made in India” phones.

The printed circuit boards, screens, cameras, batteries, and other components of these two phones are imported in India, but by the virtue of the fact that they are assembled in India, these iPhone models qualify for tax sops. Thus, making them effectively cheaper as compared to other iPhone models.

Another reason for the high prices is the presence of middlemen in the supply chain as, unlike other countries where Apple primarily sells its iPhones via company-owned Apple stores, in India, most iPhones are sold through third-party retail shops that take a hefty cut as their profit. These third-party retail stores play a crucial role in the high costs of iPhones in India as the profit charged by them ultimately reflects in the final price of an iPhone.

Will iPhones ever become affordable in India?

It’s difficult to answer this question as in order to sell affordable iPhones in India, Apple will have to set up local manufacturing units as only then the company can avoid paying hefty import duties and other taxes on its products. This can soon become a reality as there are reports that Apple wants to shift some of its manufacturing capacity from China to other countries, especially after the US-China trade war.

Source: https://www.breezyscroll.com/technology/breezy-explainer-this-is-why-iphones-in-india-are-costlier/

Source: Story.KISSPR.com