The central government has eliminated import duties on specific components utilized in the manufacturing of mobile phones and other electronic devices. The policy change completely scraps the existing seven point five percent and five percent tax levies on specified items. Reuters reported that this reduction in component costs could help major global technology brands, including Apple and Xiaomi, that maintain active production setups within the country.

The customs duty exemption encompasses critical manufacturing assemblies, including key parts required for producing wireless charging modules for mobile phones. Additionally, the policy covers display units utilized in the manufacturing of automobiles and medical equipment, alongside raw lithium-ion cells. Government guidelines confirm that this customs duty waiver will remain fully operational until March 31, 2029.

Industry Expects Lower Manufacturing Costs

According to business consultancy Grant Thornton Bharat, the removal of these specific financial levies will alter production dynamics. Grant Thornton Bharat partner Manoj Mishra stated that the decision should boost cost competitiveness, domestic value addition, and the localisation of high-value smartphone and electronics manufacturing. The reduction in initial component costs helps cushion enterprises against rising global supply expenses, which could lower the financial pressure on retail consumers.

Furthermore, the custom duty relief provided to lithium-ion cell imports is expected to attract industrial expansion. Manoj Mishra noted that the exemption for lithium-ion cell manufacturing may spur investment in domestic battery production for electronics and electric mobility. These cells form the core power storage unit for smartphones and laptops. The government expects localized processing incentives to draw larger capital commitments from international corporations.

Electronics Manufacturing Target for 2030

The recent custom duty adjustment directly aligns with long-term manufacturing goals established for the technological manufacturing sector. Sourced data indicates that India aims to expand electronics manufacturing to 500 billion dollars by fiscal year 2030. This target follows a decade of growth, during which domestic smartphone production rose 28-fold, reaching a valuation of 5.45 trillion rupees, or approximately 57 billion dollars, during the 2024/25 financial period.

The ongoing expansion of financial concessions is expected to motivate prominent global conglomerates, including Samsung, Apple, Vivo, Oppo, and Xiaomi, to scale up their existing domestic assembly facilities. The government expects the growth of the local manufacturing framework to positively influence the national Gross Domestic Product. The subsequent industrial expansions are intended to generate new employment opportunities within the technology sector.

The customs duty exemption will remain in effect until March 31, 2029, unless the government announces any changes. For now, the operational cost benefits remain tied strictly to the localized processing of the exempted components until the final deadline in March 2029.

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