Premium Cellphone Worth $940m Imported in Nine Months

EghtesadOnline: Premium cellphones worth $940 million and costing over $600 apiece were imported during the current fiscal year’s first nine months (March 21-Dec. 21, 2021), according to the spokesman of the Central Headquarters for Combating Commodity and Currency Smuggling.

News ID: ۷۸۷۷۱۳

31 January 2022

“Due to the high forex outlay of the imported premium smartphones, the parliament had increased customs tariffs for phones worth over $600 from 5% to 12% in the fiscal 2021-22 budget law. But unfortunately, it was not effective in reducing the attractiveness of premium phones,” Hamidreza Dehqani-Nia also told the news portal of the headquarters, Epe.ir.

During this period, smartphones priced over $600 used 30% of mobile currency resources, i.e., near $1 billion, but only covered the needs of 5% of the population. About 90% of imported phones costing over $600 belonged to Apple products.

Imports of these phones during the period increased by 40% compared with the total imports in the 12 months ending March 20, 2021.

In the budget bill submitted by the government for the fiscal 2022-23 (starting March 21, 2022), the clause related to collecting 12% of the import fee from premium smartphones has been removed. Therefore, the import fee of these phones will be 5% in the next fiscal year, similar to that of other phones.

“As a result, even with the foreign currency problems, more resources will be allocated to premium smartphones, while with the same resources, more phones used by different segments and the general public could be imported. It is also possible to allocate foreign currency to the import of essential goods, medicines and production inputs,” the spokesman said.

Dehqani-Nia noted that taking into account 10% as customs duty and tax on commercial phones, and 10% as a viable supply chain profit, the current price of a $600 smartphone in the market is about 180 million rials ($644), which is beyond people's purchasing power for a smartphone.

While a majority of people can’t afford premium smartphones and rely on brands with cheaper prices, the import of 27 smartphone models produced by Xiaomi, OnePlus, Realme and Nokia (which produce cheaper smartphones) has been banned due to an inbuilt difficulty in contacting the country's emergency numbers.

In a letter to the Ministry of Industries, Mining and Trade, Director General of Communications Regulatory Authority of Iran Garshasb Jamshidnejad had proposed the ban on the registration of import orders for three models of Xiaomi 11T, 11T Pro and OnePlus 9 smartphones.

In another letter to the Mobile Importers Association, the CRA chief had called for a ban on 24 other phone models because of their inability to contact the country's emergency numbers.

Total Cellphone Imports

A total of 13.06 million cellphones worth $2.94 billion were imported in the nine months ending Dec. 21, 2021, registering a 42% and 117% growth in terms of number and value year-on-year respectively, according to the technical deputy of the Islamic Republic of Iran Customs Administration’s Statistics Office.

According to these statistics, premium smartphones accounted for about 32% of total cellphone imports during the period. These figures do not include the smartphones brought in by passengers and are only based on IRICA’s official data.

“According to non-oil trade statistics for the nine months, imports amounted to 30.1 million tons worth $36.9 billion. This volume of imports includes 4,630 items [under the 8-digit HS code], which were imported from 115 countries,” Arezou Ghaniyoun was also quoted as saying by IRIB News.

The official noted that mobile phones topped the list of imported goods in terms of value and accounted for 8% of the total imports during the period, adding that the number of imported cellphones was 3.89 million more compared with last year’s corresponding period.

“On the one hand, one of the most important reasons behind the increase in the import of this product compared with the same period of last year is the rising need for smartphones by students studying at home, as most school and university classes are being held online due to the Covid-19 pandemic, as well as those of foreign language institutes. On the other hand, the short lifespan of smartphones [averaging three to five years] is another reason for the market’s need to import this consumer product,” she said.

Ghaniyoun said mobile phone imports reached 9.17 million devices worth $1.35 billion year-on-year.

“The implementation of the mobile phone registry plan has helped prevent the illegal entry and smuggling of the product into the country. This is while low tariff has facilitated the import of this product due to the lack of electronic industries for smartphone production in the country,” she added.

Ghaniyoun noted that due to the high average price of smartphones, the import of such phones accounted for 27% of the total value of imported goods during the period under review.