Why iPhone 15 is expensive Despite Made in India

India has the highest import duties on smartphones in the world. India also has a high GST (Goods and Services Tax) on smartphones.

Introduction

The recent launch of the iPhone 15 in India has triggered significant discussions among consumers due to the noticeable pricing disparity when compared to other regions. Various factors contribute to this difference, including import duties, taxes, and Apple’s global pricing strategy. In this blog post, we delve into the intricacies of these factors to shed light on why the Made-in-India iPhone 15 carries a higher price tag.

Import Duties and Taxes for iPhone 15 in India

A major contributor to the elevated price of the iPhone 15 in India is the 22% import duty imposed by the government on smartphones, including this latest model. This duty results in a 22% increase in the device’s price compared to countries without such duties. Additionally, a 2% social welfare surcharge further adds to the final price, collectively amplifying the pricing disparity.

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Price Gap Analysis for iPhone 15 India

To highlight the pricing difference, let’s compare the cost of the iPhone 15 Pro Max 1TB model in India, priced at ₹1,69,900, to its price in the US, which is $1,099. This comparison reveals a nearly 50% price gap, making the device considerably more expensive in India. Import duties and additional charges significantly contribute to this stark contrast in pricing.

Contributing factors:

  • Import duties: India has the highest import duties on smartphones in the world.
  • Taxes: India also has a high GST (Goods and Services Tax) on smartphones.
  • Cost of living: The cost of living in India is lower than in the US and Dubai. This means that Apple can afford to charge higher prices for iPhones in India.
  • Scale of business: Apple has a larger scale of business in the US and Dubai than in India. This means that Apple can negotiate better prices with suppliers and retailers in the US and Dubai.
  • Free trade zone status: Dubai is a free trade zone, which means that there are no import duties or taxes on goods imported into Dubai.

Made-in-India Label vs. Import Status

Despite bearing the “Made-in-India” label, the iPhone 15 Pro models are likely imported rather than being locally manufactured. This import status subjects them to the 22% import duty, significantly impacting the cost. The absence of a local Apple manufacturing facility in India exacerbates the situation, preventing the company from leveraging cost-saving benefits associated with domestic production.

Criticism and Future Possibilities

Apple’s pricing strategy for the iPhone 15 in has faced criticism, especially considering the higher prices compared to countries like the US and Dubai. Although the company intends to sell Made-in-India iPhone models, it does not currently offer preferential pricing. Speculations about potential reductions in import duties by the government and the establishment of a manufacturing base in India hint at the possibility of more affordable iPhones in the future.

Read More: Why iPhone 15 is a bad purchase?

Global Pricing Strategy and Local Manufacturing

Apple’s decision to maintain prices across various regions, including India, raises questions about its global pricing strategy. Consumers expected the Indian-made iPhone 15 to be more affordable, but this expectation hasn’t materialized. Experts anticipate that Apple will retain its current pricing for the time being, waiting for potential developments like reduced import duties or local manufacturing.

Made-in-India iPhone Available from Day One

A significant milestone with the iPhone 15 release is the availability of locally manufactured units right from the launch day. This marks a notable shift, signifying progress towards locally produced iPhones being readily accessible to Indian consumers.

Conclusion

The pricing of the iPhone 15 in India reflects a complex interplay of import duties, taxes, and Apple’s strategic decisions. While consumers may have anticipated more competitive pricing for the Made-in-India iPhone 15, current indications suggest that higher prices may persist in the foreseeable future. The hope lies in potential policy changes and manufacturing advancements that could eventually lead to more affordable Apple products in the Indian market.

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