Day by day, India breaking records in terms of iPhone sales. Rather prices of iPhone in India are higher than the USA and European countries. There are many reasons behind Apple product price ratio is increasing in India day by day. let’s see why apple products are very costly in India.
International Currency:
Degradation of currency is one of the key factors that affect the price of products that India imports from foreign countries. For instance, in January 2018 Dollar to Rupee cost was 1:63 however for now in July 2020 it is 1:75, which means the value of rupee has degraded by 13 rupees over the period of 30 months & this ratio will keep affecting our pockets if degradation continues.
To illustrate for iPhone that costs 1000$ in the US in 2018, in India it was costing 63000₹. For the same iPhone, the cost is raised to 75000₹ in 2020 regardless of the taxations.
iPhone is a status symbol in India:
if a person is using iPhone or Apple gadgets that means, this person is financially rich. this is what the Indian people mindset is.
It means the Apple logo behind the phone represents a person’s financial condition.
To show-off purpose, people have purchase iPhones without having knowledge of iPhone features.
One more thing people do, without knowing the features of the latest iPhone, they sell their old iPhone and buy a new one.
Taxations :
As per government rules, import duties on apple products have been increased from 15% to 20% since March 2020. Along with that, we need to 18% of GST which used to be 12% in past.
So overall when It comes to buying the imported iPhone, we have been paying a heavy amount in the form of tax only.
Along with this tax one more thing works as a ice on cake for pushing the price up,
Apple sells their products in India through a huge network of authorized retailers which adds up around 5% of the hike as the retailer’s profit ratio.
Apple don’t have their own apple stores established in India because of …
Indian policy & Production of Apple products :
Indian policy says, for any international brand to set up a store in India it has to source at least 30% of its product components locally. This is not the case currently, but it seems the picture will change soon because Apple has recently announced to initiate production in India itself.
Foxconn a Twainian organization that looks after the production of Apple products is likely to establish a production house in Chennai soon.
This will cut down the iphone price majorly due to two factors :
- Cut down in Import duties.
- Cut down in Retailer’s profit percentage.
So, we can expect a good price drop in the iPhones & the rest of Apple products once it starts the production in India.
In closing, I would say, If apple provides iPhones in the same as cost android devices have. Apple will grow its business rapidly as it is grown in the US, Europe, and Middle East countries. Due to the rising population and economic situations in India.
Author:
Mr. Kishor Chavan (Stock market analyst) (BE, Information technology)