Xiaomi has a clear pricing policy: only 5% profit. However, it seems that the prices of the company have been increased in India.
The company claims that as of April 1, today, the consumption tax of the Indian smartphone industry will increase from 12% to 18%. Therefore, they are forced to raise prices.
Price increase on Xiaomi smartphones in India
Now, mobile phone tax will increase by 50% in india. Added to this is that the exchange rate of the rupee to the US dollar has also fallen sharply.
Given these points, there is no other choice but to increase your prices. Earlier, Manu Kumar Jain, India’s chief of Xiaomi, said that the increase in the consumption tax would affect the Indian mobile phone market.
For him, there should be exemptions for models that cost less than Rs 15,000 (around $ 199). However, there is currently no such exemption.
This is the translated Xiaomi statement:
“Dear Mi fans,
I hope everyone stays safe. We urge you to remain in quarantine and diligently observe the national closure. Let us unite to safeguard the people of our nation.
We would like to share an update regarding the recent GST revisions announced by the Government of India. GST rates on mobile phones have increased by 50% from 12% to 18% as of April 1, 2020. In addition, the Indian rupee has depreciated significantly against the US dollar heating repair facts. Since we maintain a profit margin of less than 5% for all of our hardware products, we have no choice but to increase prices.
The new prices will take effect from midnight on April 1, 2020 and will soon be reflected on mi.com.
Our intention is to offer our fans the best products, with the highest specifications, at honest prices. As we strive to continue this effort, we ask for your kind consideration and support.
Please stay safe
Xiaomi India Team »
For now, it appears that it will only affect the Indian market. Hopefully this does not impact any other market like Europe.