Changes In Custom Duties On Electronics, Handset Components Likely In Upcoming Budget

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This comes after ICEA requested the Centre to rationalise tariffs for imports of mobile phones’ components in the upcoming Union Budget

Custom duties on components of electronics and mobile phones could reportedly see a potential revamp in the upcoming Union Budget to make local production easier and lower the compliance burden.

A report by The Hindu cited a source close to the development noting that the government is likely to consider the changes with the aim to encourage local manufacturing and increase local sourcing of components, adding that further simplification of customs procedures could also be on the cards.

India has a production potential of components worth $25 billion, which is about 12 percent of the global spend.

This comes after the industry body India Cellular and Electronics Association (ICEA) requested the Centre to rationalise tariffs for imports of mobile phones’ components in the upcoming Union Budget of this fiscal to inorder to realise maximum manufacturing in the country.

In light of this, the source told the publication that the government is considering reducing import duties on components of audio devices and wearables such as smartwatches and smart bands to boost local manufacturing.

This is likely to be one of the new sectors where the government expects exports to pick up, on the lines of the success in mobile phone manufacturing and exports.

Exports in the electronics components segment are expected to rise to $8 billion in FY26 from a negligible amount in FY21, while electronics components exports are expected to nearly double to $17.3 billion from $9 billion in the same period, according to the vision document released earlier this week by communications and information technology minister Ashwini Vaishnaw.

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