LG smartphone prices to rise in India after recent import duty hike

LG recently announced that it will continue to assemble its smartphones in India despite the recent import duty hike on components shipped from overseas. However, this is also causing the company to expect a rise in prices for its smartphones in the region. According to Advait Vaidya, Mobile Communications Business […]

LG recently announced that it will continue to assemble its smartphones in India despite the recent import duty hike on components shipped from overseas. However, this is also causing the company to expect a rise in prices for its smartphones in the region.

According to Advait Vaidya, Mobile Communications Business Head at LG India, “We are totally committed to MAKE IN INDIA vision & will continue to manufacture in India. In the long term, this situation will also create possibilities of local production by vendors including display & other components.” In other words, the move from the Indian government is aimed to boost the local production of such components.

For those unaware, from 1st October 2020, the central government has levied a 10 percent basic customs duty on imports of various components like display assembly, touch panel/cover glass assembly, and more. This arrives despite various requests to the government to delay the levy by a year since these components aren’t currently made in India at the moment, which may lead to prices going up in the smartphone market by at least 3 to 5 percent as per industry estimates.

LG Velvet cameras
LG Velvet

Vaidya further added that “we are closely monitoring the situation, it may have an impact on prices,” when reached out to by ET. LG is assembling its smartphone through its Pune factory and only holds less than 1 percent of the total Indian market. The components that are facing the import duty hike also make up for 25 percent of the smartphone’s cost, and it may take at least two years to establish a dedicated display fab unit in India if the company does decide to invest 300 to 400 crores on a single unit.

 

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