Posted by: alok | January 22, 2007

Price differential in a global economy..

I was planning to purchase an Apple iPod few days back, and did google to find out the price in different countries. (The price list is below). I don’t know why there’s such a wide disparity in the cost ranging from $144 to $327 for a standard product across countries… and that too in a globalized economy. Is it because of the excise duty, or some pricing strategy adopted by Apple? No doubt… that we prefer to get our electronic gadgets from countries like US/Canada/Japan. Is the Ministry of Trade and commerce oblivious of this fact? And I can just imagine the amount of sales tax that could have been generated within India, had it been priced at par with US/Canada etc.?

 I don’t have any statistics on the number and amount of electronic items purchased by Indians in overseas and brought through ‘Green Channel’, but it must run in millions of $$ every year (assuming every returning Indian brings electronic gadgets worth $500 purchased overseas). Can the government, or the product company itself do something in this matter? I am pretty sure, the sales of iPod in India would go up dramatically if its priced at par with US/Canada, generating more monetary transactions domestically (and if I include the spiral effect of money in motion, increase it by other 10 times or so), and ofcourse more revenue for the govt. as direct & indirect taxes.  And not only this, we might even attract tourists from neighboring countries and be a ‘hub for electronic items’ – as Singapore is currently, and Dubai used to be few years back..!!!

 

The price of iPod is just an indicative of price differential of electronic items across countries.

 1. Brazil $327.71

2. India $222.27

3. Sweden $213.03

4. Denmark $208.25

5. Belgium $205.81

6. France $205.80

7. Finland $205.80

8. Ireland $205.79

9. UK $195.04

10. Austria $192.86

11. Netherlands $192.86

12. Spain $192.86

13. Italy $192.86

14. Germany $192.46

15. China $179.84

16. South Korea $176.17

17. Switzerland $175.59

18. New Zealand $172.53

19. Australia $172.36

20. Taiwan $164.88

21. Singapore $161.25

22. Mexico $154.46

23. U.S. $149.00

24. Japan $147.63

25. Hong Kong $147.35

26. Canada $144.20

 (Price courtesy: EasyBourse )

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Responses

  1. ipod index (similar to big mac index) developed by an australian bank
    =================================================

    he he :), did u read this – http://www.theage.com.au/news/business/ipod-index-predicts-dollar-slump/2007/01/18/1169095892453.html?s_cid=rss_age

    to quote from the article:

    “A key difference between the iPod and Big Mac approaches is that Big Macs are made in a host of countries across the globe whereas iPods are predominantly made in China,” said CommSec chief economist Craig James.

    “Simply, an iPod nano should broadly cost the same across the globe. If there were substantial price differences customers would switch their purchases to other countries, especially given the power of the internet.”

    US $ will raise w.r.t to the currencies of 22 countries above it? BS.

  2. Hey Karthik,

    Thanks for the awesome link. Now Prof. Krishna Kumar will also have something to talk about other than the Big Mac index..!!!

    You rightly pointed out….. Technically, the cost of electronic gadgets like iPod, should be more or less the same across countries because it is being manufactured in China, and the transportation cost of an iPod would be insignificant considering its weight and size.

    Thanks once again for the link. Its simply superb.

    ~Alok

  3. You clearly haven’t consider WTO agreements and/or bilateral agreements between different countries and the subsequent tariffs. Think about it !

  4. harika bir makale bursa ikinci el eşya mağazamıza bekleriz. https://goo.gl/agbPAb


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