NEW DELHI, India—Mobile-phone handsets and pagers in India will cost less, following a reduction in duties announced in the annual budget presented in the parliament on Thursday. The new measure is expected to shrink the number of phones sold in gray markets.
“The use of cellular phones is increasing by leaps and bounds, but import through unauthorized channels is a matter of concern. I therefore, propose to exempt cellular phones and pagers from countervailing duty (CVD),” Finance Minister Yashwant Sinha announced in his budget speech.
However, the impact of abolishing the 16-percent CVD will be reduced to some extent, because the finance minister increased the basic customs duty from 5 percent to 10 percent.
Cell phone prices in gray, or unorganized, markets have been 35 percent to 40 percent lower than those legally imported, as illegal importers do not pay the CVD. India has a thriving parallel market of handsets.
