Apple ramps up prices in India following import tax hike

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iPhones just got more expensive in India.
Photo: Steve Smith/Cult of Mac

Apple has raised the price of many iPhone handsets in India, following last week’s increase in import duties on the new handset.

In new rules announced last week, the cost of importing smartphones to India was raised from 10 to 15 percent. As we noted at the time, Apple’s choices were to either raise the price of iPhones in India, or to eat some of the cost itself in order to keep pricing competitive. It seems that Apple did some combination of the two — since prices have been increased an average of 3.5 percent.

Under the new pricing, the top iPhone X model now costs 105,720 rupees ($1,646.61) for a 256GB version, representing a 3.6 percent increase. The price of a 256 GB iPhone 8 has meanwhile risen 3.1 percent to 79,420 rupees. The price of iPhone SE models manufactured in India have not increased.

Struggles in India

The Indian government’s announcement last week was designed to help local brands, which manufacture their smartphones in India. However, the price increase on imported smartphones could also pressure Apple to manufacture more of its handsets in the country. Apple manufacturer Wistron started making iPhones in India earlier this year, and has recently attempted to expand its manufacturing in the country. Along with Wistron, other Apple manufacturers Foxconn and Pegatron are also reportedly looking to expand their manufacturing presence in India.

This is easier said than done, however. At present, India doesn’t have the components infrastructure to provide Apple with everything it would need to build iPhones. As a result, Apple has to important components, which are subject to 10 percent import duty.

Right now, Apple has a 3 percent share of the market in the country, with its iPhones priced too highly for the majority of people. Although Tim Cook has been outspoken about wanting to grow this market, Apple hasn’t had an easy time of it. In addition to its current iPhone woes, Apple has also experienced a tough time gaining the necessary permissions to open a major Indian flagship retail store in the country.

While Apple continues to show its commitment to India — such as opening a local app development center, as well as other new local offices — it seems the uphill struggle to gain market share is likely to continue.

Source: Reuters