India's Budget Moves: Boosting Local Electronics Industry Through Duty Adjustments

Ahead of the national Budget announcement, India raises customs duties on certain electronics components to bolster domestic production. The Finance Ministry highlights adjustments in duty rates designed to rectify structural inefficiencies and enhance the country's status as a global electronics manufacturer.

As the nation eagerly anticipates the new Budget on February 1, the Ministry of Finance strategically emphasized changes in customs duty rates via a social media post on platform X. This initiative, part of a larger agenda to cement India's reputation as a global electronics manufacturing hub, had its roots in previous Budget announcements.

The Finance Ministry previously announced that the Basic Customs Duty (BCD) on flat panel displays would be increased to 20 percent, aiming to correct the inverted duty structure. In contrast, duties on open cells and key components were lowered to 5 percent, aligning with the 'Make in India' strategy. 'In line with our 'Make in India' policy, the BCD on Interactive Flat Panel Display (IFPD) will increase from 10 percent to 20 percent,' the Finance Minister stated, also noting a reduction to 5 percent for open cells.

The Ministry elaborated further by exempting BCD on parts of Open Cells completely. This amendment continues a successful approach akin to the smartphone sector's phased manufacturing, which saw India rise to become the second-largest global mobile producer. Although short-term price hikes for imported panels could follow, the long-term outlook points to increased domestic investment. The demand to localize supply chains is high, urging local manufacturers and global OEMs to adapt, helping build a self-reliant ecosystem for LCD and LED products while positioning India as a competitive high-tech hardware exporter.

(With inputs from agencies.)