Cracking The iPhone Price Mystery: Why 'Made in India' Doesn't Mean Cheaper iPhones

Apple enthusiasts in India are eagerly awaiting the release of the iPhone 15 series, set to hit the market soon. While the excitement for the latest gadgets is palpable, so is the curiosity about why iPhones continue to command a premium price tag in the country, despite being assembled in India.

Let's look into the factors that contribute to the relatively high prices of Apple products in India and why the 'Made in India' label hasn't led to significant price reductions.

A Bigger Base, Bigger Prices

First and foremost, it's important to note that the 'Made in India' iPhone s, including the upcoming iPhone 15 series, are not entirely 'made' in India but rather 'assembled' here. This distinction is crucial because many of the critical components required for iPhone production are not manufactured within India's borders. As a result, Apple must pay customs duties on the imported parts, which ultimately prevents a significant drop in prices. In addition to customs duties, buyers are also required to pay an 18% Goods and Services Tax ( GST ), adding up to a hefty 40% increase in the overall cost of the iPhone.

Complex Pricing Factors

It's important to recognize that the pricing of any product is a complex calculation that goes beyond just the bill of materials cost. Apple, like other smartphone manufacturers, must consider various factors when determining the final price of its products.

To mitigate the impact of heavy customs duties and additional taxes on imported models, Apple often collaborates with partners to offer discounts and trade-in options. Moreover, the profitability margins on the sale of 'Pro' models play a crucial role in enhancing the affordability of base models and older-generation iPhones.

Not All iPhones Are Created Equal

While it's true that the number of iPhones assembled in India has risen significantly over the years, not all iPhone models sold in India are 'made in India.' This poses a challenge for Apple when it comes to pricing. It's simply not feasible to have two pricing tiers – one for phones assembled in India and another for those that aren't. Consequently, the prices of iPhones assembled in India remain relatively high due to the factors mentioned earlier.

A Broader Perspective

It's worth noting that the issue of high smartphone prices isn't exclusive to Apple. Other smartphone giants like Samsung , Oppo, Xiaomi , and Vivo also manufacture phones in India, including flagship models. However, despite local production, flagship prices have remained largely consistent over the years. This suggests that Apple is not alone in navigating the complexities of the Indian smartphone market.

Looking Ahead

As Apple continues to expand its local production in India and explores the possibility of manufacturing more models in the country, there may be room for optimism regarding future pricing. However, for now, the 'Made in India' iPhones are unlikely to see a significant reduction in prices.

Instead, Apple's strategy in India appears to be focused on establishing the country as an export hub, potentially saving substantially on import duties and manufacturing costs in the long run. As a result, while Indian consumers eagerly embrace the iPhone 15 series, the full impact of 'Made in India' may still be on the horizon.