Pre-Budget Surprise: Centre Slashes Import Duty on Mobile Phone Parts to 10%

A day ahead of the budget announcement, the Ministry of Finance notified that the Centre has slashed the import duty on components essential for mobile phone manufacturing to 10%, from the earlier 15%.

The Ministry stated in the Gazette Notification that the import duty on parts such as battery cover, front cover, middle cover, main lens, back cover, GSM antenna, PU case, SIM socket, screw, other mechanical items of plastic and metal, as well as LCD foam and sticker-battery slot, among others, has been reduced to 10%.

Pankaj Mohindroo, Chairman of India Cellular And Electronics Association (ICEA), said: “This is a critical and welcome policy intervention by the Government towards making mobile manufacturing competitive in India. Building scale, riding on low input tariffs, is key to transforming India into a global hub for electronics manufacturing and exports.”

“Electronics has improved from the 9th position a few years ago to India’s 5th largest export in 2024. Mobiles constitute over 52% of electronics exports thanks to the PLI Scheme. This is the first industry to leapfrog out of import substitution to export-led growth within the past eight years. The Government has been an excellent and willing partner in this transformation,” he added.

POSSIBLE IMPACT

While the actual impact will depend on various factors, including how manufacturers respond to the change, consumer demand, and global economic landscape, the decision can have a positive effect on the industry and overall economy.

With the cost of importing essential components going down for manufacturers, the prices of mobile phones could see a dip. It could also encourage domestic manufacturing as it will be more cost effective for companies. This aligns with the government’s “Make in India” initiative, promoting self-reliance and reducing dependence on imports.

On the same lines, if domestic manufacturing grows, there is a potential for job creation in the mobile phone manufacturing sector. This can have a major impact on employment and contribute to economic development. Similarly, with a thriving manufacturing ecosystem, there is an opportunity for technology transfer and collaboration between domestic and international companies.

Overall, the decision to decrease import duties on components for mobile phones appears directed towards fostering domestic manufacturing and stimulating economic growth within the technology sector.