Authorities Axes Import Tax on Some Smartphone Elements in Enhance to Apple, Xiaomi
The federal government has eliminated import duties on some parts key to producing cellphones, Finance Minister Nirmala Sitharaman introduced within the annual finances on Saturday, in a lift for native manufacturing efforts and benefiting companies resembling Apple and Xiaomi.
India’s electronics manufacturing has greater than doubled within the final six years to $115 billion (roughly Rs. 99,41,100 crore) in 2024, with the nation now turning into the world’s second-largest cell phone producer.
Apple led the India smartphone market with a 23% share in complete income throughout 2024, adopted by Samsung at 22%, in accordance with analysis agency Counterpoint.
The checklist included parts for cell phone meeting resembling printed circuit board meeting, components of digicam modules, and USB cables, which have been taxed at 2.5% earlier.
The cuts will assist India higher address a probably disruptive 12 months of world commerce resulting from U.S. President Donald Trump’s tariff threats.
As Trump hopes for his “America First” insurance policies to lure extra manufacturing items again into the U.S., India is in search of to make the most of U.S.-China commerce tensions to extend its personal share of world provide chains.
Internally, India’s IT ministry had warned it dangers dropping out to China and Vietnam within the smartphone exports race if it have been to not decrease tariffs to lure international corporations, Reuters reported final 12 months.
Sitharaman, in her finances final 12 months, had introduced a evaluation of the nation’s customs obligation price construction to rationalise and simplify tariffs for ease of commerce.
The obligation evaluation additionally aimed toward eradicating the so-called inverted obligation buildings or situations the place tariffs on uncooked supplies or intermediate items are increased than the ultimate merchandise they’re used to supply.
India’s sophisticated tariff construction is usually cited as a deterrent for environment friendly native manufacturing and a explanation for disputes.
“The Union Finances 2025 brings excellent news for the business, together with the buyer electronics manufacturing sector. New reductions on BCD for vital parts signifies that localisation of components resembling batteries and shows will rise,” Counterpoint Analysis Director Tarun Pathak instructed Devices 360.
“The federal government’s revision of Fundamental Customs Responsibility (BCD) will bolster home manufacturing, bringing us nearer to Prime Minister Narendra Modi’s formidable $500 billion (roughly Rs.43,32,500 crore) electronics manufacturing goal. The rise in BCD on interactive flat panel shows from 10 % to twenty %, mixed with the discount on open cell and different LCD/LED parts to five %, is a forward-thinking coverage transfer that can present a big enhance to home manufacturing champions like Dixon,” mentioned Prabhu Ram, VP – Business Analysis Group (IRG), CyberMedia Analysis.
© Thomson Reuters 2025
