Apple recently unveiled its highly anticipated iPhone 15 series, boasting improved features and new technology. While Apple enthusiasts worldwide eagerly anticipate the new models, Indian consumers have been raising concerns about the high prices of iPhone 15 Pro models in India compared to other markets. Despite the fact that Apple manufactures some of its devices locally in India, there remains a significant price gap. In this article, we explore the factors contributing to the higher prices of iPhone 15 Pro models in India.
Local Manufacturing and Import Duties
Apple has been promoting its “Make in India” initiative for several years, successfully manufacturing regular iPhone models in the country since 2017. However, here’s the key distinction: the iPhone 15 Pro and iPhone 15 Pro Max models are exclusively manufactured in China and are imported to India. The Indian government imposes a 20% import duty on fully manufactured phones, which instantly raises the prices of these imported models.
On top of the import duty, iPhones are also subject to an 18% Goods and Services Tax (GST) in India. This means that before even reaching consumers, iPhone 15 Pro models already have a 38% higher price tag in India compared to their global counterparts.
Currency Exchange Rate
Apple also faces challenges related to the fluctuating value of the Indian Rupee against the US Dollar. The company needs to account for these currency fluctuations when pricing its products in India. To mitigate potential losses, Apple incorporates a buffer margin into its product pricing in India, contributing to the higher cost for consumers.
Local Manufacturing Saves Costs
On the positive side, Apple’s local manufacturing of regular iPhone models in India significantly reduces costs. The government levies only a 2.5% import duty on the components used in manufacturing, which translates to substantial savings for Apple. Additionally, local production allows Apple to benefit from a 17.5% reduction in taxes.
As a result, the pre-tax prices of regular iPhone models in India closely align with those in the United States. This makes “Made-in-India” iPhones more affordable for Indian consumers and ensures that regular iPhone models do not carry a substantial price premium.
The Indian government’s strategy of imposing import duties on fully assembled phones has successfully incentivized companies like Apple to engage in local manufacturing. This approach has not only created job opportunities within India but also encouraged investment in the local manufacturing ecosystem.
Counterpoint Research has noted that Apple has been exploring alternatives to Chinese manufacturing for its iPhones. This move reflects Apple’s recognition of the importance of diversifying its manufacturing base to ensure a stable supply chain.
While iPhone 15 Pro models are indeed more expensive in India compared to some other markets, it’s crucial to understand the various factors contributing to this pricing disparity. Local manufacturing has proven to be a cost-saving measure for regular iPhone models, but the exclusive manufacturing of Pro models in China, coupled with import duties and taxes, results in higher prices. The government’s emphasis on local manufacturing remains a driving force behind these pricing dynamics. As Apple continues to navigate these challenges, Indian consumers can expect to see more nuanced pricing strategies and potentially more affordable Pro models in the future.
