Budget 2017: Mobile Phones Prices Likely to See 1-2 Percent Hike, Says Counterpoint

With the Union Budget 2017-18, Finance Minister Arun Jaitley levied a 2 percent Special Additional Duty (SAD) on imported populated PCBs for use in the manufacturing of mobile phones. The new customs duty is likely to affect the pricing of the ‘Make in India’ mobile phones considering price of the PCBs make up a significant part of a phone’s cost. Now, market research company Counterpoint Research has estimated 1-2 percent rise in mobile phone prices.

“The PCBA is the heart of the smartphone and corresponds to more than half of the total component value going into the phones. So upon levying a special additional duty (SAD) of 2 percent, we estimate 1-2 percent rise in in mobile phone prices,” said Counterpoint in an emailed response to Gadgets 360.

In recent times, the government of India decision on the Special Additional Duty applicable on the populated printed circuit boards has seen some back and forth. For those unaware, the Union Budget 2016-17 had introduced the same 2 percent SAD, raising it from 0 percent, though it was rolled back last year.

“Almost all PCBs [are] imported in India. However, only Samsung has been doing SMT-level (Surface Mount Technology) PCBA assembly in India (mounting components on top of bare PCB). With duty on populated PCB increasing, one can expect other vendors to follow suit,” said the market research firm on the question of what percentage of smartphones ‘Made in India’ use imported PCBs.


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