Why iPhone is Costly in India?

Why iPhone is Costly in India

It’s no longer a secret that Apple iPhones are always costlier in India than in other parts of the world. I wouldn’t be wrong if I said that India is one of the most expensive places in the world to buy an iPhone. It’s not just the case with the new iPhone X launch; history shows that iPhones have always been the most expensive in India. With demonetization and the introduction of GST across the country, inflation is assumed to decrease. But that’s not the case; so what’s driving the prices of an iPhone to the sky in India? Here’s what we analyzed.

Mainly 4 reasons behind expensive iPhone

Import Duty

Role of Import Duty in iPhone Price in India
Image Source: TheBlueDiamondGallery.com

The Narendra Modi Government, from day one, had made their agenda clear that they want foreign companies to manufacture in India if they enjoy the vast Indian market. For the same, the Government also launched a Make in India campaign. The campaign has picked up momentum, and many small and large companies are setting up their manufacturing facility in the country.

However, that’s not the case with Apple. Tim Cook met the Prime Minister, Narendra Modi, a couple of times in the past, and they have also agreed to set up a facility in Bangalore to manufacture iPhone SE. But the unit is not yet operational, and iPhones are imported to sell to Indians.

To promote Make in India and demotivate imports, the Government has increased the import duty on phones and their accessories. As Apple doesn’t manufacture its devices, it has to pay hefty import fees, which is directly a cost to the customer.

GST makes iPhone costly in India

How GST Affects iPhone Price in India

GST was recently introduced in India; it didn’t increase the mobile phone tax rate, but the accessories tax rate is either 18% or 28%. It does not directly affect the price of the iPhone, but a user will consider everything before making a purchase. If accessories are costlier, the consumer will likely pass on the offer of buying the iPhone.

Positive thing is that with GST, every Indian state will have close to similar prices, which wasn’t the case earlier.

Passing on the Forex loss

How Forex Affects iPhone Price in India
Image Source: Wikipedia.org

Other Android smartphone companies are importing their devices to India, but they are not costlier. To explain that, let’s forget the import taxes and focus on the forex losses that generally come to act as currency rates fluctuate.

Most smartphone companies absorb these losses and don’t pass them on to the customer. However, that’s not the case with Apple. The Cupertino giant has a strict policy of maintaining the margins. INR has depreciated significantly against USD, and its effect is visible in the latest iPhone price.

Aggressive marketing costs

How Markteting Cost Affects iPhone Price in India
Image Source: PicPedia.org

Every smartphone manufacturer, whether it is Google, Samsung, Xiaomi, or any other, has a keen eye on the Indian market. Mostly because of the population and its purchasing power. There’s an aggressive marketing war between companies, from buying full pages of a national newspaper to buying a chunk of TV time for advertisement.

All these costs are ultimately carried forward on the head of the customer. Apple is no different, it has also entered into the marketing war in India for its flagship devices, but it is nowhere close to penetrating the mid-range market segment other manufacturers have captured. iPhone XR, which was supposed to be a little low in price, is also one of the most expensive phones in India.

Wrapping up

There’s no clear indication of when Indian users will pay prices similar to other countries for their iPhones. Apple’s manufacturing unit in India will make iPhone SE, not the latest devices. Even if that plant operates at its maximum capacity, Indian users will have to pay the premium prices for flagship devices or settle with an older version, the iPhone SE.

That’s all folks! Do share your thoughts on this in the comments.


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