India Removes Import Duties on Smartphone Parts to Boost Local Manufacturing
In a move aimed at strengthening India’s mobile phone manufacturing sector, Finance Minister Nirmala Sitharaman announced in the annual budget that the government has removed import duties on select smartphone components. The decision is expected to benefit global tech giants like Apple and Xiaomi, while also supporting local production efforts. By reducing costs for manufacturers, the government aims to further cement India’s position as a key player in the global electronics supply chain.
India’s Growing Electronics Industry
Over the past six years, India’s electronics production has more than doubled, reaching $115 billion (roughly ₹99.4 lakh crore) in 2024. The country is now the world’s second-largest mobile phone manufacturer, thanks to government-backed initiatives such as the Production-Linked Incentive (PLI) scheme. These policy measures have encouraged major smartphone brands to expand their production facilities within India, reducing reliance on imports and creating jobs in the sector.
Key Components and Market Impact
The import tax exemptions apply to essential components for mobile phone assembly, including printed circuit board assemblies, camera module parts, and USB cables, which were previously subject to a 2.5% tax. The move is expected to lower production costs and improve the competitiveness of locally assembled smartphones. According to research firm Counterpoint, Apple led the Indian smartphone market in 2024 with a 23% share in total revenue, followed closely by Samsung at 22%. With reduced import duties, companies like Apple and Xiaomi could expand their manufacturing footprint in India, making premium smartphones more affordable for consumers.
India’s Strategic Position Amid Global Trade Tensions
The tax cuts come at a time of increasing global trade uncertainty, particularly as the U.S. pursues protectionist policies under former President Donald Trump. With Washington encouraging companies to shift production back to the U.S., India is looking to capitalize on ongoing U.S.-China trade tensions by strengthening its role in global supply chains. By creating a more favorable manufacturing environment, India hopes to attract further investment from multinational corporations and solidify its position as a leading hub for electronics production.
