Winning Bizness Desk

Mumbai.The Centre has removed the Basic Customs Duty (BCD) on several key components and manufacturing inputs used in producing smartphones, laptops, smart TVs and wearable devices, a move expected to reduce production costs and strengthen India's electronics manufacturing ecosystem. The Finance Ministry has issued separate notifications granting the exemption on goods used in manufacturing display assemblies, lithium-ion cells and inductor coil modules. The duty relief has come into effect immediately and will remain valid until March 31, 2029, providing long-term policy certainty for manufacturers investing in India. Industry experts believe the decision could eventually translate into lower prices for consumers if companies pass on the cost benefits.

Boost for domestic electronics manufacturing

The duty exemption is aimed at accelerating domestic production under the government's Production Linked Incentive (PLI) programme while reducing dependence on imported components. Since display assemblies and lithium-ion battery cells account for a significant share of the manufacturing cost of electronic devices, the latest decision is expected to improve the competitiveness of products assembled in India.

The key benefits include:

• Zero Basic Customs Duty on inputs used for display assemblies, lithium-ion cells and inductor coil modules.
• Exemption valid till March 31, 2029.
• Lower manufacturing costs for electronics companies.
• Potential reduction in retail prices of smartphones, laptops and smart TVs over time.
• Greater encouragement for investments in local manufacturing.

Wide range of manufacturing machinery covered

The government's notification also grants duty-free import benefits on a broad list of specialised machinery used in electronics and battery manufacturing. These include powder dryers, automatic feeding and blending systems, slurry transfer systems, cathode and anode coating machines, compression equipment, high-vacuum pumps, winding machines, electrode cutting and slitting machines, testing equipment, separator coating machines, stacking machines and automatic packaging systems. Officials believe easier access to advanced manufacturing equipment will help companies expand production capacity while lowering capital costs.

Why the move matters for consumers

Industry executives say the decision addresses one of the biggest cost pressures faced by electronics manufacturers. Components such as display modules and lithium-ion batteries contribute substantially to the overall cost of smartphones, laptops and smart televisions.

What consumers could expect:

• Better price competitiveness for electronics made in India.
• Possibility of cheaper smartphones and laptops in the coming months.
• Wider product choices as manufacturing expands.
• Improved availability of locally assembled premium devices.
• Faster growth of India's electronics supply chain.

Supports PLI goals and reduces import dependence

The latest customs duty relief is closely aligned with the government's broader strategy of making India a global electronics manufacturing hub. At present, Indian manufacturers continue to rely heavily on imports—particularly from China and Vietnam—for several critical components, including display assemblies and lithium-ion cells. By lowering input costs and encouraging local production, the government hopes to reduce import dependence, strengthen supply chains and attract fresh investments into advanced electronics and battery manufacturing. The policy also complements ongoing efforts to expand India's role in global electronics exports.

Understanding Basic Customs Duty and its impact

Basic Customs Duty is the tax imposed on goods imported into India. Removing this levy on selected manufacturing inputs means companies can source raw materials and specialised equipment from overseas without paying the additional tax, making domestic manufacturing more economical. While the immediate impact will be seen in lower production costs, the actual reduction in retail prices will depend on individual companies' pricing strategies and market competition.

Key takeaways:

• BCD is a tax on imported goods.
• Exemption lowers input costs for manufacturers.
• Companies receive long-term policy support until March 2029.
• India aims to build a stronger domestic electronics ecosystem.
• Consumers could benefit through more affordable and locally manufactured electronic devices over time.