The government has announced the removal of import duties on essential components used in mobile phone production, Finance Minister Nirmala Sitharaman stated in the annual budget on Saturday. This move is expected to enhance local manufacturing efforts and benefit major smartphone companies like Apple and Xiaomi.
India’s Growing Electronics Sector
India’s electronics production has surged over the last six years, doubling to an impressive $115 billion (roughly Rs. 99,41,100 crore) in 2024. This growth has positioned India as the world’s second-largest mobile phone manufacturer.
Apple emerged as the leader in India’s smartphone market in 2024, capturing a 23% share in total revenue, followed closely by Samsung at 22%, according to research firm Counterpoint.
Key Components Exempted from Import Duties
The government has eliminated duties on several crucial mobile phone components, including:
- Printed circuit board assemblies (PCBA)
- Parts of camera modules
- USB cables
Previously, these components were taxed at 2.5%. The removal of these duties will help Indian manufacturers compete more effectively in the global market.
India’s Strategy Amid Global Trade Challenges
This decision comes at a time when global trade faces uncertainties due to potential tariff threats from U.S. President Donald Trump. While Trump aims to implement “America First” policies to bring manufacturing back to the U.S., India is capitalizing on U.S.-China trade tensions to expand its role in global supply chains.
India’s IT ministry had earlier cautioned that the country could lose out to China and Vietnam in the smartphone export market if import tariffs were not reduced to attract global firms. Last year, Reuters reported concerns that high tariffs could hinder India’s ability to compete in international markets.
Customs Duty Review for Trade Simplification
Sitharaman’s budget proposal last year included a review of the nation’s customs duty structure to rationalize and simplify tariffs. The aim was to eliminate “inverted duty structures,” where tariffs on raw materials or intermediate goods are higher than those on final products. This latest move aligns with that objective, ensuring a more competitive and business-friendly environment for mobile phone production in India.
With these strategic policy changes, India is poised to further strengthen its position as a global manufacturing hub for smartphones and electronics.
