NEW DELHI: In a move that can make mobile manufacturing cheaper in India, the government on Wednesday announced a reduction in import duty on certain mobile components from 15% to 10%.
According to the gazette notification, the government has slashed import duty on components such as the battery cover, main cover, GSM antenna, and others components to 10%. The government believes the move will accelerate electronics manufacturing in the country and subsequently will lead to export smartphone from the country.
“This rationalisation of custom duties brings much needed certainty and clarity for the industry and in customs processes. I thank Prime Minister Narendra Modi and finance minister Nirmala Sitharaman for this step towards strengthening the mobile phone manufacturing ecosystem,” said telecom minister Ashwini Vaishnaw.
The government had earlier raised the BCD (Basic Customs duty) from 5% to 15% on these items in 2018 under the Phased Manufacturing Programme (PMP). The move is in line with the recommendation of the Indian Cellular and Electronics Association (ICEA), which suggested duty cuts to reduce the cost of making smartphones in India. According to the ICEA, mobile phone exports from India could triple to $39 billion over the next two years, from $11 billion in FY23, if the government reduces import tariffs on components.
“This is a critical and welcome policy intervention by the government towards making mobile manufacturing competitive in India. Building scale and riding on low input tariffs are key to transforming India into a global hub for electronics manufacturing and exports,” said Pankaj Mohindroo, Chairman of ICEA.
“Electronics have improved from the 9th position a few years ago to India’s 5th largest export in 2024. Mobiles constitute over 52% of electronics exports, thanks to the PLI Scheme. This is the first industry to leapfrog from import substitution to export-led growth within the last 8 years. The government has been an excellent and willing partner in this transformation,” added Mohindroo. However, the Global Trade Research Initiative (GTRI) advised against cutting import duties on electronics components in the upcoming budget.