Smartphone buyers beware: GST may lead to 25% hike in prices

Moneycontrol BureauIn a bid to encourage local manufacturing and boost Make in India initiative, the government has hiked two percent special additional duty on of printed circuit boards (PCBs) from April 1. This would lead to hike in prices of smartphone handsets by around two percent.

However, according to a Business Standard report, CyberMedia Research estimates that with the imposition of goods and services tax (GST), the price of smartphone handsets would increase by around 25 percent.

PCBs constitute half the cost of a mobile that is around 54 percent.

PCBs are mostly imported from China and Taiwan as of now. Last year around Rs 40,000 crore of PCBs had been imported.

“Over time, we can expect smartphone manufacturing in the country by major players in India,” said Vevek Zhang, Chief Marketing Officer, Vivo India in an interview to Business Standard.

Meanwhile, industry experts say brining down 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.