Centre cuts customs duty on mobile phones, components to 15 pc; industry upbeat

With a three-fold increase in domestic production and an almost 100-fold jump in exports of mobile phones over the last six years, the Indian mobile phone industry has matured.

New Delhi: The government on Tuesday announced to reduce the basic customs duty (BCD) on mobile phones, printed circuit board assembly (PCBA) and mobile chargers to 15 per cent from the current 20 per cent.

With a three-fold increase in domestic production and an almost 100-fold jump in exports of mobile phones over the last six years, the Indian mobile phone industry has matured.

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“In the interest of consumers, I now propose to reduce the BCD on mobile phones, mobile PCBA and mobile chargers to 15 per cent,” said Nirmala Sitharaman while presenting the Union Budget 2024-2025.

India’s electronics sector has experienced rapid growth, reaching $155 billion in FY23.

Production nearly doubled from $48 billion in FY17 to $101 billion in FY23, driven primarily by mobile phones, which now constitute 43 per cent of total electronics production.

Pankaj Mohindroo, Chairman, India Cellular Electronics Association (ICEA), congratulated the government for the landmark budget.

“We are impressed with its intent and direction focusing on enhancing manufacturing and export competitiveness. The Finance Minister has also acknowledged the tremendous growth of mobile phone manufacturing and exports,” Mohindroo told IANS.

The industry had recommended reducing BCD on mobile phones, its PCBA and charger/adapter to 15 per cent, which has been accepted.

“The announcements will go a long way to enhance manufacturing, exports and our competitiveness. Our proposal for tariff slab rationalisation, as has also been acknowledged and FM has announced that it will be taken up in the next six months, will further embolden the industry and its competitiveness,” Mohindroo explained.

India has significantly reduced its reliance on smartphone imports, now manufacturing 99 per cent domestically.

According to Siddhesh Mehta, research analyst, Samco Securities, this change will reduce costs and support the Indian manufacturers.

“Dixon Technologies will benefit the most from this move, allowing the company to strengthen its market position and grow further,” said Mehta.