NEW DELHI, July 23 (Reuters) - India announced it will

cut import duty on mobile phones and some key parts to 15% from

20%, a move that will directly benefit Apple ( AAPL ) , which

still imports its high-end smartphones into the country despite

increasing local production.

Presenting the annual budget for 2024/25 in parliament on

Tuesday, India's finance minister Nirmala Sitharaman said import

tax on mobile phones, printed circuit board assembly (PCBA) and

mobile chargers is in the "interest of consumers."

Almost 10-12% of the Apple ( AAPL ) iPhones are imported each year

into India and a 5% reduction in tax on the devices will result

in a $35-50 million annual benefit to Apple ( AAPL ), said Neil Shah, a

co-founder at Hong Kong-based Counterpoint Research.

Although Apple ( AAPL ) has boosted its local production in India

through contract manufacturers such as Foxconn and

India's Tata Group, it still imports some of its high-end Pro

and Pro Max iPhone models into the country.

Apple ( AAPL ) "will directly benefit ... they (also) have some

models for which PCBAs are still being imported," said Shah.

The move will also "alleviate import duties for new players

entering the market. It's a gamechanger for them," he added.

Other manufacturers such as Samsung would also

benefit, but to a lesser degree as the majority of their

smartphones are locally made, said a source with direct

knowledge of the matter.

Apple ( AAPL ) and Samsung did not immediately respond to a request

for comment.

Apple ( AAPL ) has a 6% share of India's smartphone market, according

to Counterpoint.

India's deputy IT ministry in January privately argued for a

reduction on import taxes on mobile phones, saying the country

risks losing out to China and Vietnam in the race to become a

major smartphone export hub and must "act fast" to lure global

companies with lower tariffs, Reuters has reported.

Prime Minister Narendra Modi has in recent years promoted

India as a smartphone manufacturing hub and the nation's

$24-billion local production scheme covers mobile phones,

prompting companies such as Apple ( AAPL ), Xiaomi ( XIACF ), Samsung and Vivo to

expand local operations.

China's Xiaomi ( XIACF ) has also in the past asked for tariff

reductions on sub-components used in batteries, USB cables and

phone covers.