NEW DELHI: Chinese handset maker Xiaomi on Monday said that it is increasing the prices of Redmi Note 5 Pro smartphone by Rs 1000 and Mi TV (55 inch) by Rs 5,000 following the government's move to impose 10% duty on imports of populated printed circuit boards (PCBs), camera modules and connectors. The smartphone's 4GB + 64GB variant is priced at Rs 14,999, while the Mi LED TV 4 55 inch will now retail at Rs 44,999 starting May 1, 2018.
The development follows Xiaomi recent move to start printed circuit board or PCB assembling in Sriperumbudur, Tamil Nadu by setting up its first-ever SMT (Surface-mount technology) plant in collaboration with its Taiwanese manufacturing partner, Foxconn. The brand had also set up two other plans to ramp up manufacturing of smartphones and power banks.
Xiaomi, however, said that it would be honoring all pre-orders of Redmi Note 5 Pro 4GB + 64GB already placed on Mi.com at the original price of Rs 13,999.
On the TV, the company said that it is now importing significantly more units to meet the demand of MiLED TV 4 (55 inch)
The company's India head and international vice president Manu Kumar Jain tweeted, "In order to ramp up supply for #RedmiNote5Pro & #MiTV4 (55), we're marginally increasing the prices. This is because of the recent changes in PCBA import taxes & INR depreciation."
Xiaomi claimed that it is seeing a huge demand for Redmi Note 5 Pro and Mi LED TV 4 (55 inch), and to ramp up supply for the smartphone, it is importing a significant amount of PCBAs as our local PCBA production would only ramp up 100% by third quarter of the ongoing calendar year. "With the recent changes In tax structure on PCBA Imports and the depreciation of the rupee (by 5% since the beginning of the year), this has resulted In a significant Increase in costs for us," the company said.
"We hope that with the substantial increase in the manufacturing capacity, we would be able to do a monthly volume of one million Redmi Note 5 Pro," it added in a statement issued on Monday.
India's leading smartphone maker said that its "pricing philosophy has always been a "cost-plus" model. We strive to make the highest quality products available to all at honest pricing for all of you."
The Central Bureau of Excise and Customs, imposed the 10% duty on each of the components, through notifications issued earlier this month, making the imports of the components expensive while giving a stimulus to local manufacturing under its Make in India program. The move followed the government’s decision to impose a 20% BCD on fully built mobile phones, which came into effect from February 1, as part of its phased manufacturing program (PMP), which gives a forecast into duty incentives to spur local production of mobile phones.
The February decision also included a 10% import duty on PCB of chargers, 15% on LCD panels, and increased duty by 10% to 20% on lithium-ion batteries, and by 5% to 15% on chargers, adapters, battery packs, wired headsets, receivers, keypad, antenna, side keys and USB cables.
Source: telecom.economictimes.indiatimes.com