Union Budget 2025: India Slashes Import Duties to Make Phones, TVs, and EVs More Affordable

India is making another big move to cement its place in the global electronics market. The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman, introduces significant duty cuts on key electronic components used in mobile phones, smart TVs, and electric vehicles (EVs). The goal? Make devices more affordable, encourage domestic production, and position India as a major player in global supply chains.

This policy shift comes at a time when India is already one of the world's largest mobile phone manufacturers. By easing import costs on essential parts, the government aims to further accelerate local manufacturing, attract global tech companies, and reduce reliance on imports.

Lower Duties on Mobile Phone Components

One of the biggest announcements in the budget is the reduction in Basic Customs Duty (BCD) on mobile phones and their components:

• Duties on mobile phones, chargers, and printed circuit board assemblies (PCBAs) have been cut from 20% to 15%.
• Key parts like camera modules, USB cables, fingerprint sensors, and PCBAs will now be fully exempt from customs duties (previously taxed at 2.5%).

For manufacturers, this means lower input costs, making it more profitable to assemble phones in India. For consumers, this could translate into more affordable smartphones, which is crucial given India’s rapidly growing demand for 5G-enabled devices.

According to Arijeet Talapatra, CEO of itel and TECNO:

"The Union Budget 2025 signals a strategic move to position India as a global hub for mobile manufacturing. The proposed tariff reductions on essential assembly components-such as PCBAs, camera modules, USB cables, and display modules-are a welcome measure that will improve cost efficiencies, accelerate localization, and strengthen the Make in India initiative. This move strengthens India's position in the global supply chain, especially amidst shifting trade dynamics amongst major economies."

LED and LCD Panels Get Cheaper

The government is also focusing on reducing the cost of smart LED TVs. A key move in this direction is the complete customs duty waiver on open cells for LED and LCD television panels. Since these panels are a major cost component in TV manufacturing, this step is expected to drive down prices, benefiting both manufacturers and consumers.

EV Industry Gains from Key Duty Exemptions

Another major area of focus in the budget is electric vehicle (EV) manufacturing. To encourage domestic production of lithium-ion batteries, which power both EVs and mobile phones, the government has removed import duties on:

• Cobalt powder, lithium-ion battery scrap, and 12 other key minerals
• 35 capital goods used for EV battery production
• 28 capital goods for mobile phone battery production

These exemptions could significantly lower EV production costs, making electric vehicles more affordable and accelerating India’s transition to clean energy transportation.

Correcting Tariff Imbalances to Support Domestic Players

While several duties have been cut, the government has also increased customs duty on interactive flat panel displays from 10% to 20%. This is meant to correct an inverted tariff structure where finished goods were sometimes cheaper to import than to manufacture locally. By adjusting tariffs in this way, the government is encouraging companies to set up production facilities in India instead of relying on imports.

Additionally, the budget introduces a National Manufacturing Mission, which will:

• Provide policy support for industries like solar PV cells and EV batteries
• Offer execution roadmaps and monitoring frameworks to ensure smooth implementation
• Strengthen India’s position in global electronics supply chains

Massive Investment in Semiconductor Manufacturing

One of the most ambitious moves in this budget is the massive increase in funding for India’s semiconductor industry. The government has:

• Raised allocations from ₹1,500 crore in FY24 to ₹6,903 crore in FY25 for semiconductor development
• Committed funding to major semiconductor projects, including Tata’s facility in Dholera and Micron’s plant in Sanand
• Set aside ₹6,200 crore for the Production-Linked Incentive (PLI) scheme, aimed at boosting electronics and IT hardware manufacturing

India has been working to reduce dependence on foreign semiconductor supply chains and become a self-sufficient hub for chip manufacturing. With increased funding and incentives, the country is aiming to attract global semiconductor giants and build domestic capabilities.

India’s Electronics Industry Is Already Seeing Rapid Growth

India’s focus on local manufacturing is already delivering results. According to the Economic Survey 2025:

• The electronics industry has grown from ₹1.9 lakh crore in FY15 to ₹9.52 lakh crore in FY24
• India is now the second-largest mobile phone manufacturer in the world
• 99% of smartphones sold in India are domestically produced
• Smartphone exports between April and December 2024 reached $15.35 billion

With this strong momentum, the government is aiming to take India’s electronics production to $500 billion by FY30.

Via