Government Axes Import Tax on Some Mobile Parts in Boost to Apple, Xiaomi

The federal government has eliminated import duties on some elements key to producing cell phones, Finance Minister Nirmala Sitharaman introduced within the annual price range on Saturday, in a lift for native manufacturing efforts and benefiting corporations equivalent to 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 changing into the world’s second-largest cell phone producer.

Apple led the India smartphone market with a 23% share in whole income throughout 2024, adopted by Samsung at 22%, in accordance with analysis agency Counterpoint.

The record included elements for cell phone meeting equivalent to printed circuit board meeting, elements of digicam modules, and USB cables, which had been taxed at 2.5% earlier.

The cuts will assist India higher address a doubtlessly disruptive yr of worldwide commerce attributable to U.S. President Donald Trump’s tariff threats.

As Trump hopes for his “America First” insurance policies to lure extra manufacturing models again into the U.S., India is searching for to reap the benefits of U.S.-China commerce tensions to extend its personal share of worldwide provide chains.

Internally, India’s IT ministry had warned it dangers shedding out to China and Vietnam within the smartphone exports race if it had been to not decrease tariffs to lure world firms, Reuters reported final yr.

Sitharaman, in her price range final yr, had introduced a evaluate of the nation’s customs responsibility fee construction to rationalise and simplify tariffs for ease of commerce.

The responsibility evaluate additionally geared toward eradicating the so-called inverted responsibility buildings or cases the place tariffs on uncooked supplies or intermediate items are greater than the ultimate merchandise they’re used to provide.

India’s difficult tariff construction is commonly cited as a deterrent for environment friendly native manufacturing and a explanation for disputes.

“The Union Price range 2025 brings excellent news for the trade, together with the buyer electronics manufacturing sector. New reductions on BCD for necessary elements implies that localisation of elements equivalent to batteries and shows will rise,” Counterpoint Analysis Director Tarun Pathak instructed Devices 360.

“The federal government’s revision of Fundamental Customs Obligation (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 p.c to twenty p.c, mixed with the discount on open cell and different LCD/LED elements to five p.c, is a forward-thinking coverage transfer that can present a major increase to home manufacturing champions like Dixon,” mentioned Prabhu Ram, VP – Trade Analysis Group (IRG), CyberMedia Analysis.

© Thomson Reuters 2025